Alcom focuses on expanding coated fin business

Syahirah Syed Jaafar / theedgemarkets.com

KUALA LUMPUR (June 22): Aluminium Company of Malaysia Bhd (Alcom), whose shares jumped to an all-time high just two days earlier, is investing RM18 million to expand capacity of its coated fin stock business.

The capacity expansion will be undertaken by addition of a production line in its existing facility in Bukit Raja, Selangor.

The new line is anticipated to be fully commissioned in the next two financial years and the group expects to see return from the new line, which will add 12,000 tonnes to its annual coated fin stock capacity a year after that.

Coated fin stock is mainly used for the fin production of heat exchanger and is commonly used in the production of condenser and evaporator of air conditioners and refrigerators.

Alcom is a major player in this business and supplies to most leading manufacturers in the air conditioner market across Asia and Europe.

Alcom managing director Heon Chee Shyong is optimistic on prospects of the business, since air conditioners become more affordable as coated fin stock is becoming cheaper to produce, while demand for air conditioners rises.

“Even low cost housing has air conditioners. So [the production cost of] air conditioners has come down and demand has increased, especially in a market such as India — it’s huge,” he said.

He said the group is looking to expand its outreach beyond Asean and European markets in the near future.

Alcom shares closed up one sen or 0.51% at RM1.97. On June 20, the stock peaked at RM2.02.

Year to date, the stock has jumped near 117%. The current price gives it a market capitalisation of RM264.63 million.

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