National Aluminium plans RO7mn capacity expansion

National Aluminium Products Co (Napco) is planning a RO7mn capacity expansion to substantially increase volumes and increase market share.

The company will install two additional extrusions presses in a phased manner this year and also set up a power coating plant. The company board has approved the capacity expansion in line with its business strategy.

“The estimated cost of the expansion will be approximately RO7mn, including related civil construction. With the strategy devised, upon achievement, the company expects a substantial increase in volume and profitability post expansion,” Napco said in yearly financial report submitted to the Muscat Securities Market on Sunday.

The company said it will focus on broadening local market share as well as more exports to GCC, African and Asian countries with consistent quality, improved service and concerted marketing efforts. “The expansion programme undertaken will enable the company to capture much larger volumes and spur its growth and sustain profits in the coming years.”

With a plant in the Rusayl Industrial Area, Napco is one of the leading extruders of aluminium profiles in the GCC. It has an annual production capacity is 18,000MT, with two state-of-the-art extrusion presses.

Napco said regional markets, especially GCC, remain promising for future growth with expansion of infrastructure projects in general and the building and construction industry in particular. “The company will continue to explore opportunities for growth in its traditional and new markets as the prospects for the aluminium extrusion industry look optimistic.”

It added that installed capacity in the region is expected to increase further in 2015.

The company posted total revenues of RO19.4mn for the year ended December 31, 2014, an increase of four per cent over the previous year. Net profit, however, dropped to RO701,000 from RO1.18mn.

“Net profit decreased primarily due to pressure on operating margins resulting from increased input costs, as a result of higher raw material prices and increased wage bill. Increased competitive supplies from abroad and a price-sensitive market,” also hurt full-year profits, the company said.