Sakura Ferroalloys Sdn Bhd, which is expected to commission its manganese alloy smelting plant in Samalaju Industrial Park, Bintulu in October, is eyeing major steel manufacturers to sell its products.

General manager Chris Rowe said besides Malaysia, the potential markets for Sakura Ferroalloys were big steel producers in Indonesia, Japan, South Korea and Taiwan.

“The smelting plant project is currently 65% complete and will be commissioned in October this year. Production will be ramped up and full production is expected in July 2016,” he told StarBiz.

The US$328mil (RM1.2bil) plant, which will have 81MVA furnaces in full operation, has an installed capacity of 170,000 tonnes per annum of high carbon ferro-manganese and silicon manganese.

Manganese is a key component in the production of steel. Manganese alloys are added to deoxidise molten steel and act as a hardening agent.

Sakura Ferroalloys is a tripartite joint venture of South Africa’s Assmang Ltd, Japan’s Sumitomo Corp and Taiwan’s China Steel Corp. Sumitomo has a 17% stake in Assmang via its interests in Oresteel Investments (Proprietary) Ltd, the parent of Assore Ltd. Assore and African Rainbow Minerals Ltd equally own Assmang, which will supply the raw materials (manganese ores) to the Sakura Ferroalloys plant.

Rowe said China Steel would be one of the off-takers of Sakura Ferroalloys’ production.

On the choice of Sarawak over Taiwan and Dubai by the company to build its manganese alloy smelting facilities, Rowe said the availability of competitive renewable energy was a key consideration.

Sakura Ferroalloys will get between 75MW and 80MW of hydro power from Bakun dam under a power purchase agreement with Sarawak Energy Bhd.

Sakura Ferroalloys is one of the three companies involved in ferroalloy and manganese productions in Samalaju Industrial Park. OM Materials (Sarawak) Sdn Bhd - a 80:20 joint venture between Australian-listed OM Holdings Ltd and Cahya Mata Sarawak Bhd (CMS) - is currently ramping up its production while Pertama Ferroalloys Sdn Bhd is also expected to commence production soon.

Asked if there were plans for Sakura Ferroalloys to expand the plant to raise production capacity in the future, Rowe said this would depend on the market demand for manganese alloys, adding “if we are successful, there is potential for expansion.”

He said manganese prices had been trending downwards in the past 18 months,and analysts have forecast the trend to persist this year.

Meanwhile, Samalaju Industrial Park, which is designed for energy-intensive industries to leverage on competitive hydro power, has attracted 15 companies, with total approved investment of over RM25bil, according to Sarawak Industrial Development Minister Datuk Amar Awang Tengah Ali Hasan.

Awang Tengah said four of the companies - Press Metal Bhd (aluminium smelting), Japan’s Tokuyama Corp (producer of polycrystalline silicons for solar cells), OM Sarawak and Iwatani-SIG Gases Sdn Bhd (industrial gases manufacturer) - were in operations.

He said three other companies - Cosmos Chemicals Bhd, Elkem Carbon Malaysia Sdn Bhd and Malaysian Phosphate (Sarawak) Sdn Bhd - were currently carrying out site preparatory works for the construction of their respective plant.

Cosmos Chemicals’s plant project is designed to produce 25,000 tonnes per year of high quality solar and electronics grade polysilicon.

Elkem Carbon, which is owned China’s National Bluestar, is developing an electrode paste plant while Malaysian Phosphate is investing some RM1bil to build an integrated phosphate complex with an annual production of 500,000 tonnes of phosphate products.

“Other companies which have been issued with manufacturing licences are at various pre-implementation stages. There are also entrepreneurs that are currently at various stages of discussions and negotiations with the state government to invest in Sarawak Corridor of Renewable Energy, particularly Samalaju Industrial Park,” said Awang Tengah on an investment update.

• [Editor:Sophie]