Executes Stage 1 Construction Agreement for HPA Plant
- Stage 1 works construction agreement executed with SMS
- Works to occur in parallel with project finance close
- Bulk earthworks, retaining walls, storm water tanks and foundation piling
- Also includes site electrical sub-station structure and maintenance workshop
- Majority of the ~A$10 million site works credited against US$280 million EPC contract
Construction works covered under the stage 1 construction agreement includes bulk earthworks; extensive foundation piling; the construction of retaining walls; underground storm water/process discharge tanks (OSD tanks); construction of the site electrical sub-station structure; and construction of a maintenance workshop. The maintenance workshop will be used as the construction site offices during stage 2 of the HPA plant construction. Engineering works incorporated in the stage 1 construction program include the finalisation of layout drawings and the construction permitting process (Development Order) from local authorities.
The stage 1 agreement covers the first 6-7 months of the proposed two year construction period. The value of the works is approximately A$10 million, the majority of which will be credited against the US$280 million lump-sum fixed-price HPA plant EPC contract awarded to SMS which will commence following finance close.
Altech has decided to equity fund stage 1 construction in Malaysia to maintain project momentum and the works will be conducted in parallel with project finance close.
About Altech Chemicals Ltd
HPA is a high-value, high margin and highly demanded product as it is the critical ingredient required for the production of synthetic sapphire. Synthetic sapphire is used in the manufacture of substrates for LED lights, semiconductor wafers used in the electronics industry, and scratch-resistant sapphire glass used for wristwatch faces, optical windows and smartphone components. There is no substitute for HPA in the manufacture of synthetic sapphire.
Global HPA demand is approximately 25,315tpa (2016) and demand is growing at a compound annual growth rate (CAGR) of 16.7% (2016-2024), primarily driven by the growth in worldwide adoption of LEDs. As an energy efficient, longer lasting and lower operating cost form of lighting, LED lighting is replacing the traditional incandescent bulbs.
Altech Chemicals Ltd