Posted on 13 Nov 2015
But while the company said it would improve “its operational efficiency” in a bid to boost margins, the industry remained vulnerable to cheap imports from overseas.
“The board expects the influx of cheap Chinese steel products to continue until our government adopts effective measures to curb these unfair trade practices,” it said in a filing with Bursa Malaysia.
Despite the challenges, group managing director Chow Chong Long hopes the company will return to profitability in the next financial year, driven by the group’s new hot-rolled coil (HRC) business.
“The HRC segment allows the group to tap into a wider market, broadening our income base,” he said after the group’s AGM yesterday.
HRC, which is used for making flat steel products, are used in the construction, industrial, automotive, and white goods products.
Chow said the group’s HRC segment, which was in the upstream category, had the capacity to produce about 700,000 tonnes of steel products a year.
“The present production figure is 10,000 tonnes to 15,000 tonnes per month,” he said.
Chow said the 15,000 tonne HRC output was to meet the needs for the local steel industry and for the group’s own needs.
“Our current long bar production is around 100,000 tonnes per month,” he said.
The current local steel industry consumes some 4 million tonnes of HRC products per year, of which 2 million tonnes are imported.
The group’s upstream steel products such as bars, wire-rod, and HRC contribute about 70% of the group’s revenue, while downstream steel products such as wire mesh and pipes generate the remainder.
“The group would continue to review its strategy to counter act against the dumping import, and with the government’s support, adopt a more effective approach against unfair trade practices in the industry.
“The government needs to respond positively to the trade action by the industry players in a speedier manner,” Chow said.
