PETALING JAYA (Feb 28): Press Metal Bhd is looking to grow its output by an additional 20% this year to 760,000 tonnes, from 620,000 tonnes in 2016, a target based on the assumption of full capacity from its existing plants.

The region's largest aluminum smelter is also targetting for value added products growth to 50%, from 20% currently, group CEO Datuk Paul Koon P K said after Press Metal's extraordinary general meeting (EGM) and high court convened (HCC) meeting today.

Koon added he was positive on China's outlook, whereby the encouraged use of aluminum, especially in the automobile and transportation industry, is likely to sustain demand.

"China is also very concerned on the environment and its emissions," Koon told reporters, saying this limitations on production in China is good news for Press Metal.

Last October, Press Metal signed a joint venture (JV) with Sunshine Development Co Ltd (SDCL) to form Shandong Sunstone & PMB Carbon (SSPC), in which it holds 20% and has an option to increase its stake to 40%.

The JV was expected to start operations in 18 to 24 months from October.

The group has also allocated an additional capex with a ballpark figure of RM100 million, in order to double its billet production in Sarawak.

The smelter obtained shareholder approval today for its proposed internal reorganisation of Press Metal, which would see Press Metal Aluminum Sdn Bhd assume Press Metal's listing status.

The proposed reorganisation would see its new listed entity act as an investment holding company, while absorbing Press Metal's existing board of directors.

Yesterday, Press Metal saw its net profit for its fourth quarter ended Dec 31, 2016 (4QFY16) surge 250% to RM131.78 million, from RM38.8 million in the previous year's corresponding quarter, boosted by additional output and improved London Metal Exchange (LME) prices.

Koon said the group is happy with the current aluminum price level, although as alumina makes up 30%-40% of its cost and is currently fully imported, the group would be interested in venturing upstream as well.

However, it is still in an exploratory stage, Koon said.