Press Metal upbeat on aluminium industry outlook

Press Metal Bhd is upbeat on the outlook of the aluminium industry driven by supply shortage amid higher demand from various industries including car, construction, aviation and cable.

Group chief executive officer, Datuk Koon Poh Keong, said despite the forecast deficit of one million tonnes this year, more industries were moving to use it primarily due to the tighter regulation on emission control in the Western countries.

"The price of aluminium has been holding well. It is at US$2,000 a tonne now and next year is set to be US$2,200," he told reporters after the company's extraordinary general meeting on Thursday.

Last year, the price stood at US$1,700 per tonne.

He said car sector was one of the major industries shifting from steel-based to aluminium as seen by US Ford Motor Co's recent move to change its truck model.

Apart from the car sector, he said, construction sector was also using more aluminium in the construction of high-rise building as the metal was lighter and maintenance free.

"Other sectors which also used a lot aluminium are aviation, cable and electronics such as smartphones," he said.

Koon said aluminium, which required less energy to melt and recycle, was also deemed to be greener. Regionally, he said, the demand for aluminium was expected to be around six million tonnes this year.

Press Metal and another company from Indonesia, the only two companies in the region producing aluminium excluding China's producers, stood at around 600,000 tonnes, he said.

According to Koon, Press Metal has a maximum capacity of 440,000 tonnes from two plants, one in Mukah and one in Bintulu, Sarawak. He said China barred its producers from exporting aluminium because of the high energy cost while the more advanced countries, such as Japan and South Korea, did not produce their own aluminium.

On prospects, he said, Press Metal was looking to venture more into the car sector by providing value-added products such as alloy wheels.

"We aim to double the revenue contributions from the car sector to 30% next year from up to 15% this year," he said.

Koon said currently up to 85% of the company's products were exported.

He said the company was also maintaining its dividend policy of between 30% and 50% per cent of net profit.

Press Metal, founded in 1986 and based in Shah Alam, Selangor, is listed on Bursa Malaysia under the Main Market.