Singapore's Nico Steel Ramps Up its Production Capacity by 120% in China

Singapore headquartered Nico Steel Holdings has announced that the company's subsidiary in China, Nico Steel Technology (Suzhou) Co (NS Tech) has invested about RMB 3.83 million (USD 786,000) to increase its production capacity and cut wastewater discharge at its electroplating facility in Suzhou, China.

The company has invested this amount to set up a new production line, wastewater treatment, and water recycling plant.

Capacity increased from 20 tonnes to 44 tonnes per month

At present, the company has a production capacity of 20 tonnes of metal alloys per month with an average daily wastewater discharge of about 220 tonnes from two production lines. These proprietary metal alloys can be customised with copper, nickel and/or tin coatings over aluminum metal material, and their thickness varies between 0.1mm and 0.3mm. The production volume and amount of wastewater discharge depend on the required customisation for the metal alloys.

However, in anticipation of an increase in orders for its proprietary Nico branded metal alloys, the Group installed an additional production line with the customised wastewater treatment and water recycling system during the last quarter of the financial year ending 28 February 2019 ("FY2019"). This expansion is aimed at raising production capacity by another 120% to reach an optimal volume of 44 tonnes of metal alloys per month.

The average daily wastewater discharge will also increase in tandem with the three production lines, although at approximately 60% to 350 tonnes per day. For illustrative purposes, the in-house wastewater treatment and water recycling system is able to reduce the average wastewater discharge from 11 tonnes to 8 tonnes for every tonne of metal alloy produced. This reduction could potentially lead to cost savings of approximately 20-40% from the regulated fee charged for every tonne of wastewater discharged from the electroplating production facility.

Wastewater treatment in line with China's target to curb pollution

The Group believes that its wastewater treatment and water recycling initiative is aligned with the Chinese government's commitment to reduce pollution in the Chinese city. The key standards of wastewater discharged from NS Tech's production facility include: 1) the quality of water discharged must meet the stringent standards set by the local authorities for the industrial park, and 2) the aggregate amount of discharged water per day should not exceed 500 tonnes. These standards are closely monitored by the management of the industrial park. Failure to comply could lead to an immediate production halt or even a revocation of the operating license.

The management further added that the Group does not expect the increased production capacity to have a material impact for FY2019 as there will be trial productions and a period of stabilisation before the company ramp up their capacity.