ANNJOO (6556) - AnnJoo's cost leadership in steel industry

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Ann Joo - Cost leadership in steel industry

Comparing among the steel players, Ann Joo fetches the highest profit margin and remains as market (cost) leader in the steel industry.
(Lion Industries is excluded as it also owns loss making Parkson retail business). 

Ann Joo blast furnace plant

EAF = Electric Arc Furnace
The blast furnace - iron-making plant with an annual capacity of 500,000 metric tonnes is commissioned in year 2011 and consists of a 450m3 Blast Furnace and 75m2 Sinter Plant. It is the first modern Blast Furnace (BF) in Malaysia and is also the first and only in Southeast Asia combining the technology of BF and Electric Arc Furnace (EAF). The hybrid technology via hot metal charging into the EAF enables the manufacturing of high grade and engineering grade steel products of higher purity at a competitive cost besides achieving higher steel output, yield and substantial savings in electricity consumption. Balance of hot metal from BF will be casted into pig iron in the pig iron casting machine for own consumption or sale.
The by-products of hot metal have various uses. For instance, molten slag is granulated and is sold as raw materials to a few industries. The off-gas produced from the BF is directed to the Top Gas Pressure Recovery Turbine to generate electricity for the plant and the reduced-pressured BF gas is channelled to the sinter plant, rolling mills and hot blast stove as fuel medium to substitute natural gas.

Flexibility of feedstock - iron ore or scrap metal
Superior technology of Ann Joo hybrid blast furnace-EAF allows it to compete efficiently. One of the features of Ann Joo’s integrated blast furnace-EAF is that it allows for flexibility in the feedstock, unlike other Electric Arc Furnace (EAF) steel makers. Hence, Ann Joo is able to either use iron ore or scrap metal as feedstock.
The flexibility in feedstock allows Ann Joo to switch raw materials. For instance, when scrap metal is more expensive than iron ore, so it can opt for iron ore to manage and reduce input costs, and vice versa.

Consume less electricity and natural gas
Apart from flexibility in feedstock, Ann Joo’s hybrid blast furnace-EAF allows for lower logistics cost, consumes less electricity and requires lesser natural gas to operate. The hot metal from BF charged into EAH gives substantial savings in electricity consumption. BF gas is “recycled” or channelled to other plants as substitute for natural gas.

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