MANAGEMENT DISCUSSION & ANALYSIS BY GROUP CEO Cont’d OVERVIEW OF PRESS METAL Press Metal Aluminium Holdings Berhad (“Press Metal” or the “Company”) is a Malaysian-based aluminium company principally engaged in the manufacturing and trading of both midstream and downstream aluminium products. We were incorporated in 1986 and subsequently became a public listed company in 1993. Over the years, we have grown into an integrated aluminium corporation and the largest aluminium producer in Southeast Asia, with a production capacity of 1,080,000 tonnes per annum for the smelting segment. We are also a prominent producer in aluminium extrusion with a production capacity of 210,000 tonnes per annum. The Smelting Segment The smelting segment is our Group’s core business which produces the basic aluminium ingot P1020 and the valueadded products such as alloy ingot A356.2, aluminium billets and wire rods. We have two (2) smelting plants operating in the “Sarawak Corridor of Renewable Energy” economic region where power is predominantly generated from the hydropower plants. Our plant in Bintulu has 3 phases, with aggregate capacity of 960,000 tonnes per annum, while our other plant in Mukah, Sarawak, has a capacity of 120,000 tonnes per annum. Our key markets for primary aluminium and value-added products are European countries (31%), Korea (15%), Malaysia (15%) and Vietnam (10%). The Extrusion Segment Our Group’s extrusion segment produces a wide range of extrusion products utilised in the construction, automobile, consumer-related products, electronic and electrical industries. Presently, Press Metal owns two (2) extrusion plants, one in Klang district of West Malaysia and another in Foshan, Guangdong Province, China. The annual capacity of these two plants are 50,000 tonnes and 160,000 tonnes per annum respectively. Further, via our trading arms, we have a presence in United Kingdom, Australia and North America to market our extrusion products internationally. The primary markets for our extrusion products include China (31%), Malaysia (19%), United Kingdom (19%), United States of America (“US”) (19%) and Australia (6%). Upstream Assets and Investments To secure our raw material supply, we have ventured vertically upstream and completed several acquisitions over the past few years, especially for key raw materials and consumables required in our smelting operations being alumina and carbon anode. This will ensure a stable supply and quality over the long term and avoid any disruption in the smelting process. Alumina Assets Investments Alumina is the primary raw material for our Group’s smelting segment. We own 50% equity interest in Japan Alumina Associates Pty. Ltd (“JAA”) which in turn holds 10% interest in Worsley Alumina Unincorporated Joint Venture (“Worsley UJV”) located in Australia, one of the world’s largest and lowest cost alumina producers. Through this investment, we are entitled to a supply of 230,000 tonnes of alumina per annum. We also hold 25% equity interest in PT Bintan Alumina Indonesia (“PT BAI”) which is principally involved in alumina production in Pulau Bintan, Indonesia. PT BAI has completed the construction of its Phase 2 facility with a capacity of 1 million tonnes per annum. Including its Phase 1 facility that was commissioned in 2021, the total production capacity of PT BAI has reached 2 million tonnes per annum at the end of 2022. With our investments in JAA and PT BAI, our Group will be able to secure up to approximately 80% of our alumina requirement. This serves to enhance the stability of our Group’s aluminium operations by reducing reliance on thirdparty suppliers and shielding us against supply disruptions. ANNUAL REPORT 2022 14
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