Malaysian and Chinese billionaires strike $330 million deal in aluminum sector

Strategic stake swap marks new phase for Press Metal and Nanshan Aluminium

by Faruk Imamovic
Malaysian and Chinese billionaires strike $330 million deal in aluminum sector
© Getty Images/Sean Gallup

Aluminum industry: Malaysian tycoon Koon Poh Keong is extending his partnership with Chinese billionaire Song Zuowen through a $330 million agreement involving their aluminum companies. This strategic deal, announced on Thursday, marks a pivotal moment for both parties as they swap stakes to further consolidate their market positions.

Press Metal and Nanshan Aluminium swap stakes

Under the terms of the agreement, Koon’s Press Metal Aluminium Holdings will divest its entire 25% stake in Bintan Alumina Indonesia. In exchange, Press Metal will acquire a 25.6% share in Song’s Nanshan Aluminium International Holdings.

This exchange is set to be completed by July 31, according to the official announcement. Nanshan Aluminium, a subsidiary of Shandong Nanshan Aluminum, is slated to be spun off and listed separately in Hong Kong. The initial public offering (IPO) is intended to raise funds to support future expansions.

This IPO application will proceed following the completion of the transaction with Press Metal. Press Metal initially acquired its stake in Bintan Alumina four years ago to ensure a stable supply of alumina, a crucial raw material for its smelting operations.

Currently, Nanshan Aluminium holds a 72% indirect stake in Bintan Alumina.

Bintan Alumina's strategic importance

Bintan Alumina operates a significant 2-million-tonne-per-year alumina plant on the Indonesian island of Bintan, situated about an hour by ferry from Singapore.

This plant is well-equipped with a dedicated power facility and a private port, located within the Galang Batang special economic zone. The rising global demand for aluminum has prompted Shandong Nanshan to announce a $6 billion investment plan last year, aiming to expand the Bintan Alumina plant by 2028.

Koon Poh Keong, along with his siblings, has a combined net worth of $5.3 billion. They ranked fifth on Malaysia’s 50 Richest List released in April. The Koon family founded Press Metal in 1986 with an initial capital of $50,000.

Since then, the company has evolved into Southeast Asia's largest integrated aluminum producer by output. On the other side of the deal, Song Zuowen, with a net worth of $2.5 billion according to Forbes, controls the Nanshan Group.

This conglomerate has diversified interests that extend beyond aluminum to include apparel, education, and aviation. The group's primary aluminum company, Shandong Nanshan Aluminium, has been listed on the Shanghai Stock Exchange since 1999.