KUALA LUMPUR (Oct 31): Perusahaan Sadur Timah Malaysia (Perstima) Bhd plans to set up a new plant for the manufacturing of tinplate and tin-free steel in the Philippines.

This is subject to the approval of the local authorities in the Philippines.

In a filing with Bursa Malaysia today, Perstima said it has conducted a feasibility study on the market in the Philippines and found that there is currently no existing tinplate and tin-free steel manufacturer there.

"The annual domestic demand is approximately 220,000 tonnes comprising 170,000 tonnes and 50,000 tonnes of tinplate and tin-free steel respectively. Currently, the tinplate and tin-free steel in the Philippines are sourced from other countries and hence, there is a potential market in the Philippines.

"In addition, there would be incentives for tinplate and tin-free steel manufacturers as a base industry to be provided by the Philippines government to support the Philippines economy if the proposed investment meets the criteria set," it added.

Perstima said the proposed investment is not expected to have any material effect on the group's earnings per share, net assets per share, gearing, share capital and substantial shareholders’ shareholding for the financial year ending March 31, 2019.

"Further announcement will be made when the relevant approvals from the local authorities are obtained," said Perstima.

Perstima currently has operations in Pasir Gudang Industrial Estate Johor, Malaysia and Vietnam Singapore Industrial Park in Thuan An District, Binh Duong Province, Vietnam.

Its manufacturing facilities in Malaysia are currently able to support a total maximum production capacity of 200,000 tonnes per year, and 120,000 tonnes in Vietnam.

Shares in Perstima closed 13 sen or 2.88% higher at RM4.65 today, bringing it a market capitalisation of RM461.77 million. The stock has appreciated about 23% year-to-date, from its closing of RM3.78 on Dec 29, 2017.