Product Data Sheet
Web Hits Statistics
Source:-The STAR 31 May 2002
Alcom taking steps to meet Afta challengeBy KATHY FONG
ALUMINIUM Company of Malaysia Bhd (Alcom) expects the implementation of Asean Free Trade Area (Afta) next year will affect the company’s profitability because the import tariff for aluminium products will decline to 5%.
Having foreseen the upcoming challenges, Alcom – the country’s largest aluminium products manufacturer – has decided to shift its operation focus to rolling production of aluminium foil and sheets.
It divested its extrusion business of its unit Alcom Extrusion Sdn Bhd to Chin Foh Malaysia Bhd in February.
“We intend to focus on the rolling business because that is where we expect sustainable profitability will come from,’’ Alcom managing director Chan Kok Heng said after the company’s AGM in Petaling Jaya yesterday.
Chan said the rolling segment was more lucrative than the extrusion segment, which was highly fragmented and competitive. The major consumer group for the extrusion segment is the construction sector.
According to Chan, products in the rolling section are higher value-added and fetch a better profit margin compared with extrusion products.
Furthermore, its capital-intensive nature makes the rolling business more difficult to enter, therefore resulting in less intensive competition.
He said Alcom was keen on penetrating the food packaging industry, a large consumer group for the aluminium foil, and is resilient in economically difficult times.
Alcom currently supplies its rolling products to air-conditioner makers as well as the electronics and electrical industry.
Chan also highlighted that 80% of its products were exported, including to the free trade zones in the country.
“We have positioned ourselves well in the export market. This will also help us to take up the challenges arising from the implementation of Afta,’’ he said.
Asean is the major export market for Alcom, which also exports to China and Europe.
For the first financial quarter ended March 31, Alcom posted a pre-tax profit of RM275,000 compared with a pre-tax loss of RM1.42mil, on a lower turnover of RM57.4mil against RM64.9mil a year ago.
Its net loss contracted to RM759,000 in the period under review from RM1.95mil in the previous corresponding period, while its loss per share dropped to 0.57 sen from 1.47 sen formerly.
Alcom said in a statement to the KLSE that a fatality at the end of last year caused the cold mill at the rolling plant to cease operations temporarily for two weeks in January.
The disruption to production affected shipments, which in turn dragged down the company’s turnover during the financial quarter under review.
“In spite of the setback in the 1st quarter of this year, the loading at Alcom’s rolling operations remains strong for the 2nd quarter.
This is in view of the gradual improvement in the global economy and the expected demand for finstock from the air-conditioning industry,’’ the company said.
Alcom investing RM10m to upgrade milling facility
Source:-The STAR 31 May 2001
ALUMINIUM Company of Malaysia Bhd (Alcom) is investing RM10mil this year to upgrade its sheet and foils milling facility, said managing director Tadeu Nardocci.
"The investment will enable the group to produce higher value-added products and expand its customer base," Nardocci told reporters after the group's AGM in Petaling Jaya yesterday.
According to Nardocci, the group is targeting to increase its annual rolling mill capacity to 50,000 from 35,000 tonnes in the next five years.
However, he said such a move would depend on customer demand.
The group has allocated RM15mil to RM16mil for capital expenditure this year.
It spends RM2.5mil on research and development annually to stay competitive.
On its outlook for the current year, Nardocci said the group hoped to maintain its strong performance despite experiencing a shortfall in the volume of production during the first quarter of the year.
Touching on the slowdown in the US economy, he said that this was expected to have an indirect effect on the group's revenue.
He added that efforts to continually develop new markets and introduce new products were expected to boost the group's turnover.
"Some customers have cut down on orders due to the slowdown, but the group is continuously sourcing for new opportunities," Nardocci said.
The group's major clients include multinational companies which manufacture electrical appliances such as air-conditioning units, which were then exported to the US market.
On its business in China, Nardocci said the group planned to re-enter the market by introducing a different type of coated paint product which was more cost effective.
Also, Nardocci said, the group was taking a relook at its extrusion business.
"It is an extremely competitive environment as there are 32 extruders operating in the country. With the construction sector facing a slowdown, price cutting among competitors has led to a margin squeeze," he said.
For the financial year ended Dec 31, 2000, the group posted a record revenue of RM317mil, up 12% on the previous year.
However, profit after tax was slightly lower at RM12.5mil due to the margin erosion.
The group has declared a tax-exempt final dividend of 5%.
China to build aluminium plant in