Asian Company Plans on Being Largest Scrap Smelter in World

Ye Chiu Metal Smelting Bhd is planning to invest $20 million to expand its operations in China that will make it the owner of the world's largest scrap metal smelter.

Its chairman and managing director Huang Chung Sheng said the investment would be for setting up an additional plant in Shanghai by 2006, which would increase its aluminum alloy production capacity to about 20,000 metric tons per month.

To date, Ye Chiu Metal has invested $10 million on its existing Shanghai plant, which was completed last June, with a production of 6,000 metric tons per month. Its plant in Johor also has a capacity of 6,000 metric tons a month.

 “After completion of our (new) plant in China by 2006, we will be the biggest scrap metal smelter in the world,” Huang told reporters after a ceremony to mark its transfer to the Main Board.

The company’s Shanghai plant now has an operating rate of 33 percent with a production of about 2,000 metric tons a month, while the Johor plant has an operating rate of greater than 80 percent with a production of about 5,000 metric tons per month.

Huang expects the price of aluminum alloy to increase by a further 30 percent this year from about $1,500 per metric ton due to the escalating copper price of $3,000 per metric ton from US$1,800 per metric ton last year.

The smelting company sources 30 percent of its raw materials locally and 70 percent from the Asean region. It exports aluminum alloys to countries in the region, Japan and Taiwan. Its largest market is China, which accounts for about 50 percent of its sales. The Daily Edge