Malaysia’s Press Metal Bhd set to up the ante with Samalaju smelter

Press Metal Bhd (Press Metal), a public-listed aluminium company with an extensive global presence, has been regarded as being significantly undervalued but is now set to be on a strong upward trajectory as its greenfield aluminium smelting plant in Samalaju is set to swing into full production capacity in the future.

The company, which also operates aluminium extrusion plants in Selangor as well as Guangdong and Hubei in China, has come the long way before taking its place among the giant aluminium smelters, according to RHB Research Institute Sdn Bhd (RHB Research) analyst Ng Sem Guan.

That being said, the real earnings accruement would come from Sarawak as a combination of inexpensive electrical power and a deep sea port – among other catalytic activities surrounding the Sarawak Corridor of Renewable Energy (SCORE) in Samalaju Industrial Park – look to boost the company’s fundamentals via its smelting plants in Mukah and Samalaju.

“Press Metal is in final stages of commissioning Press Metal Bintulu Sdn Bhd (PMB)’s smelter in Samalaju. As this smelter is 2.66 times larger than its Mukah – Press Metal Sarawak Sdn Bhd (PMS) – smelter, it enjoys overhead cost efficiency.

“The state-of-art 400kA (kilo ampere) smelting technology PMB employs also consumes 10 per cent less power than PMS while its proximity to Bintulu Port – 77km versus 187km from Mukah – may save PMS US$30 a ton in logistics cost,” Ng pointed out in an extensive 33-page report.