Press Metal smelter plant may lose RM150 million revenue due to halt

A three-week production halt last month at Press Metal Bhd’s smelting plant due to a fire may have cost the company up to RM160 million in lost revenue.

“It would not be an entire loss, it’s a production loss. But certainly, the aluminium price is a big impact to revenue,” group chief executive officer Datuk Paul Koon said.

“At the moment, the aluminium price is around US$2,000. But we have substituted this revenue by doing trading ,” he said.

He was speaking to reporters after the company’s AGM yesterday.

A three-week production halt on May 17 at its smelter in the Samalaju Industrial Park, Sarawak, had resulted in an output loss of around 60,000 to 80,000 tonnes for the company.

The company’s current production capacity stands at 440,000 tonnes. It is nearing completion of the third phase of its smelter that will see capacity jump to 760,000 tonnes.

“It will take some time for us to ramp up production to full capacity” after the incident, he said. The company is assessing the total amount of direct and indirect losses from the fire. Koon added that Press Metal is sufficiently insured.

“We are dealing with so many furnaces in our factory, 300 of them, and they are all operating at 1,000 degrees. “It’s a lesson learnt, although costly. But we believe we have better knowledge on how to handle all this. We are just a five-year-old plant. In the five years, this has never happened,” said Koon.

Press Metal’s third phase of its smelter at Samalaju Industrial Park will be complete by year-end, and hopefully, running at full capacity by the first quarter of next year.

The third phase, which has a capacity of 320,000 tonnes, will bring the company’s upstream contribution to more than 90% of group revenue.

Taking into account its third phase expansion of the Samalaju plant, Press Metal’s gearing would climb to between 1.4 times and 1.5 times.

Ideally, the company would have its gearing levels between 0.5 times and 0.6 times.