PMB Technology Bhd CEO Koon Poh Ming
KUCHING: PMB Technology Bhd
, which will raise the annual installed capacity of its metallic silicon output by 50% when its new Phase 3 plant in Samalaju Industrial Park in Bintulu starts commercial production soon, is poised to boost the supply of the strategic raw material to the expanding global solar industry.
Executive director/chief executive officer Koon Poh Ming said with the increasing solar panel installation, especially from the western market, and increased demand for sustainability and traceability in the supply chain, the PMB Technology group is well positioned to increase its supply of metallic silicon to this market in the near future.
He said the Phase 3 facility, which is currently under testing and commissioning, will increase the plant’s total installed capacity by 36,000 tonnes to 108,000 tonnes per annum.
Phases 1 and 2, which are both in operations, have a combined installed capacity of 72,000 tonnes per annum. The plant has a total supply of 129MW of electricity from Syarikat Sesco Bhd. Phase 3 is slated for commercial operation in the current second-half year 2024.
“By delivering on our long-term strategy of enhancing our position as a low-cost, low-carbon footprint producer that continuously focuses on achieving the highest verifiable standards on sustainability and traceability, we will attain a strong standing amongst the industry players,” said Koon in a circular to shareholders.
The circular is in relation to the company’s proposed rights issue on a full subscription basis to raise an estimated RM300mil.
PMB Technology has announced a second fund-raising exercise – via a proposed private placement – of up to 2% of the company’s total number of issued shares or up to about 32 million new shares. At an indicative issue price of RM2.02 each, the company targets to raise an additional RM64.6mil.
On Sept 9, PMB Technology entered into a conditional share subscription agreement with Japan’s Hanwa Co Ltd to subscribe for 24 million placement shares.
Hanwa, which is listed on the Tokyo Stock Exchange, is a long-term customer of PMB Technology. Through Hanwa’s participation in the company, PMB Technology said the group aims to develop a stronger presence in the semiconductor and chemical industry in Japan.
PMB Technology said it may secure other strategic investors to participate in the proposed private placement.
The company plans to utilise 60% (RM38.76mil) and 39.6% (RM25.57mil) from the proceeds of the private placement to pare down bank borrowings and for working capital, respectively.
Koon said the group had total borrowings of RM949.4mil, of which RM210mil was used to finance the Phase 3 metallic silicon plant project. The proceeds from the proposed rights issue will be utilised entirely to repay bank borrowings after deducting RM1.2mil for the estimated expenses for the rights issue exercise.
“The (Phase 3) expansion is expected to increase operational efficiency by leveraging workforce and raw material management. Our group will be able to secure large quantities of raw materials at a lower price to achieve a greater economy of scale in production and to remain competitive in the global market,” said Koon.
He said the group’s metallic silicon manufacturing segment is expected to face challenging market conditions in the near term due to relatively lower growth from the automotive and construction sectors.
On global supply of metallic silicon, he said recent developments in China have indicated that supply should come under greater control as producers start cutting back on capacity to counter unsustainably low-price levels.
“Consumption is expected to gradually shift out of China to meet the requirements of end-consumers in the west that are placing greater emphasis on supply chain traceability, transparency and resilience.
“Global supply chains, especially the ones that produce goods or commodities that are critical for the future, which have hitherto been optimised predominantly based on costs, are being reconfigured for resilience to reduce over-dependence on any single, dominant source of supply.
“In the metallic silicon and solar industry, goods that have traces of Chinese inputs are increasingly being shunned by the western end-consumers and this trend is only expected to intensify. This opens up opportunities for metallic silicon producers that have a fully traceable and sufficient supply of non-Chinese inputs in their production process,” he added.
Koon said with long-term and constant power supply secured by a competitive rate and strategic location of PMB silicon facility (which is less than 10km from Samalaju Port) that reduces logistic costs, it would be able to compete in the metallic silicon industry.
