Press Metal plans JV project in China to manufacture pre-baked carbon anodes

Malaysian aluminium major Press Metal Bhd is getting into a joint venture (JV) with a Chinese aluminium raw material supplier to build a project in China to manufacture pre-baked carbon anodes, company confirmed this in a statement to Bursa Malaysia.

The aluminium extruder said that the project in collaboration with Sunstone Development Co Ltd (SDCL) of China will have an estimated capital expenditure of 450 million yuan (RM280mil).

According to the agreement, Press Metal will take up a 20% stake in the JV company to be called Shandong Sunstone & PMB Carbon Ltd, and it will have an option to increase the stake to 40% after three years and within the completion of fourth year.

The company confirmed that the strategy behind this JV is to secure long-term supply of pre-baked carbon anode, for their subsidiaries, namely, Press Metal Sarawak Sdn Bhd and Press Metal Bintulu Sdn Bhd. Pre-baked carbon anodes are one of the most indispensable raw material for aluminium smelting process.

The company also assured that the JV agreement would not have any material effect on the earnings, net assets and strategies of the Press Metal group for the FY2016 to be ended on Dec 31.

Notably, Press Metal International Ltd in Foshan is a subsidiary of Press Metal in China, which is one of the largest aluminium products exporters in the country. It also owns an extrusion facility in Hubei. Its joint venture partner SDCL deals in the production and distribution of pre-baked carbon anodes to the aluminium industry in the domestic and international market.

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