KUALA LUMPUR: Ta Win Holdings Bhd, a manufacturer of copper wires and rods, is targeting more than RM100 million revenue from its new cable manufacturing business for the year ending June 30, 2020
Chief financial and operating officer Stan Zabolotsky said the target would be driven by the continued demand from the automotive, oil and gas and renewable energy in light of more technologically-advanced parts of its value chain.
“We believe the global demand for copper would be stable as the industry is not volatile due to diverse application across industries like transportation, infrastructure and renewable energy,” he told the New Straits Times in an interview recently.
The company recently established two subsidiaries to embark on the production of copper cable and recycling of copper manufacturing value chain to provide a stable revenue stream.
Zabolotsky said the local market accounted for 50 per cent of the group’s revenu, followed by 30 per cent in China, and 20 per cent from Southeast Asia and India.
Ta Win allocated RM15 million in the year ended June 30, 2019 to set up a production facility to produce copper rod from recycled copper materials and acquire custom-made machinery equipment to produce a high-end copper cable with cross-linked polyethylene coating.
Coating for copper wiring is also important to avoid heat transfer in case of any malfunction.
“We anticipate testing our machinery equipment by mid-October this year to satisfy our requirements for these new businesses.
“Once the testing is finalised, we will tender several contracts worth tens of millions ringgit to the government and original equipment manufacturers (OEM) to supply copper cables and cables harness to local and foreign suppliers based in Malaysia,” he added.
Zabolotsky said the new equipment would be in operational at five production lines.
He said the company is expected to produce between 150 tonnes and 200 tonnes of high-end copper cable a month by 2020, while up to 1,000 tonnes per month in capacity to produce cooper rod from recycled copper materials.
Zabolotsky said copper cable wiring is an important element for the electrical and electronic components.
It is primarily used in the automotive sector and renewable energy (solar), as well as infrastructure.
“Copper is a good conductor of electricity and heat as well as resistant to corrosion. Currently, only 12 per cent of the copper deposits is being extracted worldwide and 40 per cent of the global demand is sourced from recycled copper materials,” he said.
Meanwhile, Zabolotsky said raw prices of copper in the last five years had averaged from US$5,600 to US$7,500 per tonne.
“Although we source the raw materials, copper price does not affect us as we mostly delay our purchase when the price hikes.
“We are not sensitive to the copper prices as the market is generally stable. We produce end products with diverse applications,” he said.
Zabolotsky said the ongoing trade war between the United States and China posed a short-term impact on the industry but the demand of copper worldwide would continue to remain sustainable.
“This is due to the long-term impacts of China One Belt One Road initiative, supported by the transportation, infrastructure and RE sectors,” he said.
Zabolotsky said copper would be the new ‘oil’ in the 21st century, citing that the metal gradually becoming important natural resource to various sectors to transmit electricity that powers everything around the consumers.
“We don’t expect any scarcity of copper as the world only extracts about 12 per cent of the global deposit,” he said.
Copper would be an important metal in the electrical and electronic component, particularly in electric vehicle (EV) as it requires more copper wiring to power the car, Zabolotsky said.
“Everything in EV is all about electric and electronic. Hence, it needs more copper wiring to transmit electrical energy from the battery to power all the other components of the EV,” he said.