Jul 11 2006
Smorgon Steel will acquire a 20% interest in Suntech Metals Company ("Suntech Metals"), a subsidiary of the listed Thai company Suntech Group. As part of the agreement with Suntech Metals, Smorgon Steel will exercise day-to-day operational rights over Suntech Metals' operations and trading activities.
It is estimated that Thailand currently consumes approximately 5,000,000 tonnes of ferrous scrap per annum, of which around 40% is generated domestically. Suntech Metals currently handles approximately 170,000 tonnes of ferrous scrap – both HMS and shredder feed – per annum. Although Suntech Metals handles only minimal amounts of non-ferrous material, it will complement the existing presence in Thailand of Smorgon Hartwell Recycling, which is an active participant in both the non-ferrous and stainless steel scrap markets.
Suntech Metals is located on a 47 acre site at Chonburi, 120 kilometres east of Bangkok and adjacent to several major steel-making operations and major deep-water port facilities. Suntech Metals' processing equipment includes a 3,000 hp shredder and 2 x 1,000 tonne shears. The business employs in excess of 100 people.
Smorgon Steel will nominate 2 Directors on the Suntech Metals Board.
Smorgon Steel has also passed further milestones in the implementation of its strategy to grow its metal recycling business.
Smorgon Steel has acquired a lease over land in Darwin, NT, on which it will establish a metal recycling facility. This facility will commence operations within the next 2 months. The Company has also leased a 4 acre site in Auckland, New Zealand and has commenced construction of a metal recycling yard. This facility, which will open in August and reach full operation by October, will collect both ferrous and non-ferrous scrap metal.
The Company has opened an additional Asian trading office in Hanoi, Vietnam. The new office adds to Smorgon Steel's existing network of trading offices in China, India, New Zealand and the United Kingdom.
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