Kuala Lumpur, 4 April 2008 – The Lion Group announced today that its subsidiary company, Lion Blast Furnace Sdn Bhd which is wholly owned by Lion Diversified Holdings Bhd (LDHB) signed an EPCC (Engineering, Procurement, Construction and Commissioning) contract with Beijing Shougang International Engineering Technology Co Ltd of China.
The contract is for the supply of plant and machinery including construction and commissioning costing USD239 Million for a 2.2 million ton Coke Oven and 2.8 million ton Sinter Plant for Lion’s Iron Making Project to be undertaken at its Steel Complex in Banting, Selangor.
Earlier, on 4 February 2008, Lion Blast Furnace had signed an EPCC contract with Wisdri Engineering & Research Incorporation Limited of China to construct and commission a 2,580 m3 size Blast Furnace with a capacity of 2.5 million tons of liquid hot metal per annum.
The capital expenditure for the Iron Making Project consisting of Blast Furnace, Coke Oven, Sinter Plant, Pellet Plant, Raw Material Yard and port jetty facilities is estimated to be approximately RM2 billion, with the facilities to be operational from July 2009.
Beijing Shougang is an international engineering company with the Shougang Group as a major shareholder. It provides technical consultation, engineering design, engineering general contract and supervision in the fields of metallurgy, buildings, infrastructure, environmental protection and equipment integration. It has successfully completed more than 6,000 projects in China and abroad.
YBhg Tan Sri William Cheng, Lion Group Chairman & CEO signed on behalf of Lion Blast Furnace while Beijing Shougang Chairman & CEO, Mr He Wei signed on behalf of the Chinese company. The signing was witnessed by YB Tan Sri Muhyiddin Yassin, the Minister of International Trade & Industry together with His Excellency Cheng Yong Hua, the Ambassador from the People’s Republic of China to Malaysia.
Further to the Blast Furnace project, the Lion Group is planning to install another 1.6 million tons capacity of LD Converter – Ladle Furnace – Vacuum Oxygen Degassing - Slab Caster - medium size Plate Mill with an investment of RM1.75 billion.
The Blast Furnace project, including Coke Oven and LD Converter shall produce substantial waste gas and the Group is planning to install a dedicated Power Plant with an investment of RM 400 million, which will help to reduce its energy cost.
The total steel investment in the pipeline (for Blast Furnace Project, Slab Caster & Plate Mill, Dedicated Power Plant) is approximately RM 4.15 billion.
In his speech, Tan Sri William Cheng said, “With all these new projects, the steel making capacity at Lion Steel Complex in Banting will be more than 6.5 million tons, boosting Lion Group’s total steel making capacity from all its plants in Malaysia, to over 8.2 million tons. With the completion of these projects, we will be able to produce high grade and clean steel as well as special steel. It will further improve the quality of our products and reduce our costs, and make the Lion Group one of the biggest steel producers in ASEAN.”