Published June 10, 2009

Sims Group unit to invest in copper facility

By PAULINE NG
IN KUALA LUMPUR

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A SUBSIDIARY of the Sims Group plans to invest RM100 million (S$41.3 million) in a copper wire and rod making facility in Malaysia, with production to commence next year with an initial monthly output of 1,000 metric tonnes.

At a ground breaking ceremony yesterday in Port Klang, managing director of the Sims Group of companies, Rajiv Singh, said the Malaysian authorities had helped fast-track the manufacturing licence for its local unit Sims Copper, which aims to achieve a monthly production volume of 3,000 metric tonnes in the third year of its three- year investment plan.

The copper specialist group whose reputation was built on trading, found the projected leap in revenue - from about S$70 million at present to an estimated RM500 million in the third year of the factory operating - a key reason to go into the competitive business of manufacturing.

With eight years of copper trading under its belt, Mr Singh said Sims Group was confident it could thrive in the competitive industry with the continued support of its suppliers, customers and other stakeholders.

For example, Duplex Wires & Millennium Wires had agreed to share its customer relationships in the business in India with Sims Group, he said of its planned strategic customer alliances.

Sims Group would source the raw copper from Africa and export at least 80 per cent of the finished products, a huge chunk of it expected to go to India where infrastructure development needs have pushed up demand for copper products.

Sims Copper's export- oriented model was one of the reasons the 400-hectare Port Klang Free Zone (PKFZ) was chosen as a site for its nine-acre factory.

Its choice of the PKFZ will give a little shot-in-the- arm to the zone, which has come under intense public criticism after initial development costs of about RM2 billion ballooned by more than three times - and looks set to rise further.

In the 18 months since works were completed, only 14 per cent of the zone has been utilised.

Shrugging off the controversy, Mr Singh said Sims Copper had looked for a 'logistically efficient solution' and after considering other locations, decided the PKFZ best met its needs.

He expects the factory to be able to commence copper wire production by the first quarter of next year followed by rod production in the quarter after.