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Friday, June 28, 2013

Masteel sets aside RM100mil as capex for new mill


KUALA LUMPUR: Malaysia Steel Works (KL) Bhd (Masteel) is allocating RM100mil for capital expenditure (capex) over the next two years to construct a new steel rolling mill.
Managing director and chief executive officer Datuk Seri Tai Hean Lengis targeting the new mill to be completed by early 2015 and boost the company's annual steel bar production capacity to 550,000 tonnes from 350,000.
“The new mill is adjacent to our Bukit Raja, Klang, meltshop and would give us greater operational efficiency in terms of logistics and economies of scale,” he told reporters after the company's AGM.
Tai said that 65% of the capex would be funded with bank loans and the balance with internal funds.
On another note, Tai hopes works on the 100km intercity rail network from Iskandar Malaysia to Singapore will start early next year.
“We are targeting to finalise the financing by the end of the year and it would take approximately three years to complete the development,” he said.
The joint-venture company for project, Metropolitan Commuter Network Bhd, is 60% owned by Masteel and the balance by KUB Malaysia Bhd. Masteel would be in charge of the operations of the rail network post-completion.
As for steel sales, Tai expects the volume to increase by between 8% and 10% this year.
However, he noted that the company's revenue would experience slow growth this year due to declining global steel prices.
Tai said the company planned to increase dividends to 15% this year from 13.4% in 2012.

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