Kinsteel Berhad considers to construct billet plant

Kinsteel Berhad considers to construct billet plant

Malaysian steel producer Kinsteel Berhad is considering to build a steel billet plant in 2005 located in Gebeng, Pahang. A total investment of RM 150 million (approx. $39 million) will be expected for the plant. The plant is scheduled to complete in 2007. Through this project, the company could reduce the group's production cost as well as improve its competitiveness. Kinsteel is going to diversfy its upstream activities with the plans of converting the company into an integrated steel manufacturer as part of the group's future expansion to further strengthen its presence in the steel industry. Company authorities stated that, the billets were constituting about 80% of the total cost of production of Kinsteel. Furthermore, Kinsteel provides billets from local suppliers while importing certain sizes of billets which are not available in the local market. Kinsteel manufactures mild steel round bars, high tensile deformed bars, angle bars, flat bars and U-channel bars for particularly the construction and infrastructure industries. The seven steel production mills of the company which are located at Gebeng Industrial Estate in Kuantan, have an annual total production capacity of around 500'000 tons. 40% of which is performed by Kinsteel. Kinsteel has announced its net profit as RM 11 million for the financial year ended December 31, 2002 with a 15% increase when compared to previous year's RM 10 million. This result is related to RM 324 million turnover. Meanwhile iron ore sale was decrease during the year. Despite, the company compansates the sales by an increase in the manufacture and sale of bars by RM 28 million due to strong market demand.