Alcom sets aside RM18 million capex

PETALING JAYA: Aluminium Company of Malaysia Bhd (Alcom) will be allotting RM18 million as capital expenditure (capex) which will be deployed over the course of the next two financial years, to increase the manufacturing capacity of coated finstock segment.
This entails the building of a new line at its existing site at Bukit Raja with an additional capacity of up to 12,000 tonnes annually. The facility is expected to be commissioned in August 2018.
“That is the segment we have been pointing to, that is where the margin is,” Alcom managing director Heon Chee Shyong told reporters after the group’s AGM and EGM yesterday.
Alcom’s primary product – aluminium coated finstocks – are found in air-conditioners. He said there is demand for the product, as air-conditioners are becoming more affordable.
Upon the launch of this new line, the group will look out for new markets “in developing countries beyond Asia”. Currently, it supplies to big players in the air conditioning industry such as Panasonic and Daikin.
Meanwhile, Alcom’s roofing segment will be pushed to the backburner for the time being given the glum prospects of the segment due to consolidation in the building and construction industry.
Alcom which was running on losses prior to turning around in 2016, saw a more than four fold jump in net profit to RM11.69 million for the financial year ended March 31, 2017 from RM2.57 million a year ago. Revenue increased by 10.3% to RM317.1 million from RM287.4 million.
On the financial outlook, Heon said the group will work towards addressing the gaps in the previous financial year, to better its performance.
It is however looking to maintain the results achieved in the past financial year in the current one, despite only having nine months under its current term, following a change in its financial year end.
Recently, Alcom announced of a proposed capital reduction and repayment of RM42.99 million or 32 sen per share to its shareholders.
Heon said he has been “mandated to grow” Alcom which is now under the control of its new substantial shareholder, Yeoh Jin Hoe, who holds 59.22% in Alcom, through his investment vehicle Towerpack Sdn Bhd.
Novelis Inc was previously the controlling shareholder of the group.