KUCHING: PMB Technology Bhd ’s metallic silicon plant in Samalaju Industrial Park, Bintulu will raise its annual production by 36,000 tonnes more when its phase three expansion project is operational by September this year.
The furnaces for the phase are currently under testing and commissioning, and are expected to commence production by third quarter 2024 (3Q24).
The related capital expenditure together with the improvement works for the existing facilities, RM320mil, was incurred in financial year 2023 (FY23).
“With both phase one and two up running, the group’s combined annual installed capacity is 108,000 tonnes with a total power of 129MW secured with Syarikat Sesco Bhd,” according to PMB Technology in its 2023 annual report.
PMB Technology is an associate of Press Metal Aluminium Holdings Bhd, which is South-East Asia’s largest integrated aluminum producer having manufacturing facilities in Samalaju Industrial Park and Mukah, Sarawak.
PMB Technology embarked on the phase three expansion project after securing an additional 25MW of electricity from Sesco in October 2022.
The plant’s phase one, which also has an installed production capacity of 36,000 tonnes per annum, started production six years ago. The plant’s capacity was doubled to 72,000 tonnes per annum on commissioning of the phase two in 2020.
The group will continue to explore its potential expansion in Sabah despite an earlier decision not to further extend the period of the memorandum of understanding (MoU) that PMB Technology signed with Sabah Oil & Gas Development Corp, which lapsed on March 28, 2024.
Under the MoU, PMB Technology was exploring the potential sub-lease or sale of 200 acres of land at Sipitang Oil and Gas Industrial Park, Sabah, and the development of a new silicon metal production plant there, with sufficient, constant and steady supply of natural gas at acceptable rates to the company.
Its wholly-owned subsidiary PMB Silicon Sdn Bhd undertakes the metallic silicon manufacturing operations.
Global silicon prices, according to PMB Technology, exhibited a steady decline throughout most of 2023 and ended the year down about 23% despite a strong rebound in 4Q23.
Output outside of China fell during the year as several producers curtailed output due to the challenging market conditions.
This reduction in output was, however, insufficient to offset the lacklustre demand outside of China which remained below the level reached in 2018.
And as output in China during the year was stable and adequate to meet demand, the industry was tipped over into an oversupply situation.
In 1Q24, PMB Technology group chief executive officer Koon Poh Ming said the silicon market indices registered a divergence in performance between Asian and western markets.
“Despite a pickup in activity, price levels in China fell during the quarter as supply continued to outstrip demand, prompting destocking efforts across the industry.
“However, market conditions in China are likely to improve going forward as government measures to revive the property sector and bolster the country’s economic recovery should have a positive impact on the industry.
“On the other hand, persistent supply-side constraints caused prices in Europe and the United States to continue to trend upwards from the preceding quarter. Reduced imports and shipping disruptions contributed to the surge in price levels.
“The sustainability of the higher price levels will eventually depend on underlying demand conditions, which displayed signs of improvement in the first quarter, however, lingering concern about inflation and interest rates cloud the outlook for the rest of the year,” he said when commenting on current year prospects when the company released its 1Q24 financial results recently.
Koon said the group continues to place emphasis on further improving its competitiveness in the global market by driving improvement in operational efficiency and cost reduction.
“In particular, our ongoing efforts to improve the mix of our raw material supply, by seeking supply from reliable sources that are within a closer proximity to our production facilities, have begun yielding encouraging results.
“Our persistent focus on strengthening our position in the industry will improve our chances of capturing a greater share of the market opportunities going forward,” added Koon.