Posted on 25 Oct 2019
Malaysia is considering suspending new steel projects which will duplicate steel products already made in the country, Kallanish understands.
The Malaysian government is seeking a cabinet mandate to freeze new manufacturing projects of the production of “like” steel, Dr Ong Kian Ming, Deputy Minister of International Trade & Industry, told delegates at a forum on Thursday organised by the Malaysian Iron & Steel Industry Federation.
Policies are being considered to temporarily suspend new projects which will yield steel products already made in Malaysia. It is feared additional steel output could lead to an excess supply situation.
This is part of 68 recommendations in a white paper which the Malaysian steel industry has put forward to the new Malaysian government to chart the industry’s direction for the next ten years, Kallanish learns.
All new projects are required to apply for a manufacturing licence and apply for related tax incentives through the relevant ministries in the federal government, Dr Ong said.
A massive new project at Samalaju Industrial Park in Bintulu, Sarawak, has not yet received its manufacturing licence, delegates said on the sidelines. Wenan Steel announced that its project of 5 million tonnes/year could be expanded up to 10m t/y (see Kallanish 30 August 2019). “There has not been any official announcement so far,” a delegate said. It is a wholly-owned Chinese project and there has not been much detail on whether it will be upstream or what type of products it will make.
Dr Ong also said the Malaysian government would like to facilitate the consolidation of the steel industry by providing fiscal incentives for mergers of two or more companies. These could include tax exemptions and waivers of stamp duties on a case-by-case basis. Earlier this month, two Penang-based longs mills, Ann Joo Resources and Southern Steel, entered into a memorandum of understanding to form a 55:45 joint venture company.
|
Source: MITI, Malaysia |
H1 2018 |
H1 2019 |
Change (%) |
|
Crude steel production |
1.7mt |
2.7mt |
+58.8 |
|
Exports of iron & steel |
2.2mt |
3.5mt |
+54.5 |
|
Imports of iron & steel |
5.2mt |
4.7mt |
-9.6 |
