KUALA LUMPUR: Melewar Industrial Group Bhd (MIG) yesterday signed a memorandum of understanding (MoU) with Kazmy Steel Company of Kazakhstan in which MIG is to be the turnkey design-and-build contractor for a mycrosmelt steel plant in Almaty.
Undertaking the job in Kazakhstan will be MIG’s 70% unit Melewar Integrated Engineering Sdn Bhd (MIE), which will act as the project manager to provide the necessary expertise, experience and resources to design and build the plant.
The proposed investment in the plant is estimated at RM178 million via a joint venture by MIE and Kazmy. Of the RM178 million, 30% will come directly from shareholders and 70% via bank borrowings from Kazakh financial institutions.
“Kazakhstan is big as it is the ninth largest country in the world. It is a major producer of steel especially in the northern region near Astana,” MIG chairman Tunku Ya’acob Tunku Abdullah said.
Almaty is the largest city in Kazakhstan, located almost 2,000km south of Astana, the capital of the former Soviet republic, where the country’s steel production facility is located.
The plant is likely to have an annual capacity of 100,000 tonnes per annum and provides cheaper long products, including integrated re-bars, said Tunku Ya’acob.
While the cost of transporting steel through Astana to Almaty is high, MIG’s mycrosteel technology has helped to maintain the costs.
Construction work on the plant is slated to start in the second quarter of 2012, with the targeted completion date in 2013.
For 1Q ended Sept 30, 2011, MIG incurred a net loss of RM15.65 million on RM218.46 million revenue. For the corresponding period a year ago, the company suffered a net loss of RM7.46 million from RM157.93 million in sales.
Tunku Ya’acob added that the group intends to exit the power generation business in Thailand by selling its plant there to concentrate on the steel production business.
MIG’s power generation arm contributed RM75.82 million in revenue for the quarter and it accounted for RM13.32 million of MIG’s RM16.48 million loss before tax.
MIG ended trading yesterday at 49.5 sen, slipping half a sen.
This article appeared in The Edge Financial Daily, December 9, 2011.
Undertaking the job in Kazakhstan will be MIG’s 70% unit Melewar Integrated Engineering Sdn Bhd (MIE), which will act as the project manager to provide the necessary expertise, experience and resources to design and build the plant.
The proposed investment in the plant is estimated at RM178 million via a joint venture by MIE and Kazmy. Of the RM178 million, 30% will come directly from shareholders and 70% via bank borrowings from Kazakh financial institutions.
“Kazakhstan is big as it is the ninth largest country in the world. It is a major producer of steel especially in the northern region near Astana,” MIG chairman Tunku Ya’acob Tunku Abdullah said.
Almaty is the largest city in Kazakhstan, located almost 2,000km south of Astana, the capital of the former Soviet republic, where the country’s steel production facility is located.
The plant is likely to have an annual capacity of 100,000 tonnes per annum and provides cheaper long products, including integrated re-bars, said Tunku Ya’acob.
While the cost of transporting steel through Astana to Almaty is high, MIG’s mycrosteel technology has helped to maintain the costs.
Construction work on the plant is slated to start in the second quarter of 2012, with the targeted completion date in 2013.
For 1Q ended Sept 30, 2011, MIG incurred a net loss of RM15.65 million on RM218.46 million revenue. For the corresponding period a year ago, the company suffered a net loss of RM7.46 million from RM157.93 million in sales.
Tunku Ya’acob added that the group intends to exit the power generation business in Thailand by selling its plant there to concentrate on the steel production business.
MIG’s power generation arm contributed RM75.82 million in revenue for the quarter and it accounted for RM13.32 million of MIG’s RM16.48 million loss before tax.
MIG ended trading yesterday at 49.5 sen, slipping half a sen.
This article appeared in The Edge Financial Daily, December 9, 2011.
