Melewar aims to sell money-losing Thai power plant in 1H 2014

by **Cals** Fri 29 Nov 2013, 18:22

Business & Markets 2013

Written by Bernama

Friday, 29 November 2013 16:15

KUALA LUMPUR (Nov 29): Melewar Industrial Group Bhd, a steel tubes maker, aims to sell its money-losing power plant in Thailand by the first half of 2014.
The company is currently in talks with three buyers, two from Thailand and one from South Korea, to sell the three-year-old plant, Executive Director Datuk Lim Kim Chuan told reporters after the group's annual general meeting today.
The company might not be able to recoup the plant's investment of US$110 million, he said.
The plant, which has an annual capacity of 160 megawatts, has been losingmoney because one of the two clients had failed to purchase power from its plant due to financial trouble.
Some 40 interested buyers have done due diligence on the plant but most have withdrawn their interest, he said.
This is because the industrial zone where the plant is located will take three to five years to be fully operational with more companies setting up facilities, according to Lim.
Dragged down by the power plant operation, Melewar yesterday said pre-tax loss for the first quarter ended Sept 30, 2013, widened to RM34.355 million, from RM7.483 million for the corresponding period of last year.
Revenue in the same period was down to RM230.849 million, from RM253.579 million a year ago.
The company, however, expects the steel tubes business to remain profitable next year.
"The steel business is still profitable, although it is not that profitable as it used to be," said Executive Chairman Datuk Yaacob Tunku Abdullah.
The profit has been greatly impacted by cheaper steel products imported from China and slower construction demand in Malaysia, Yaacob added.