Misif urges action from government to enhance steel industry competitiveness
Posted on July 28, 2012, Saturday
KUCHING: To enhance the competitiveness of the iron and steel industry of Malaysia, the government is urged to review the current Iron and Steel Policy of August 2009 into a National Iron and Steel Policy, incorporating the role of the iron ore mines and a balanced handling of the entire value chain of the steel manufacturers.
The Malaysian Iron and Steel Industry Federation (Misif) addressed the topic during a media conference yesterday.
In a press release, Misif recapped that a study by the Boston Consulting Group (BCG) had identified three key initiatives to enhanced the competitiveness of the industry – to provide advantaged access to selected raw materials, to enforce trade remedies and standards and to enhance capabilities of the overall industry.
“It was recommended that there should be shared responsibility where the government should extend the responsibility not just to one or two players, but to the whole value-chain in the industry,” Misif noted.
There was also a specific recommendation for ‘flat steel restructuring for Megasteel Sdn Bhd’ and steel industry support in terms of access to key inputs, steel industry capabilities, standards and import processes among others.
The BCG study also derived another recommendation that a steel council be launched which the Malaysian Ministry of International Trade and Industry (Miti) had agreed to and was said to be in the process of establishing by the end of August this year.
The federation stressed that the government should endorse BCG’s recommendations in the study and immediately establish the steel council to implemented the detailed action plans, not forgetting an independent Malaysian Steel Institute for the role it could play in servicing the expanding industry in multiple aspects.
“It was reiterated that all the parties concerned should get their act together to make the industry competitive,” the press statement said.
Supporting the findings in the BCG study, Misif also announced during the media conference that, “We are pleased that the government is finally taking heed of the pleas and plight of the local steel players. As the steel industry is of strategic importance to the nation.
“The industry should be accorded a national status and be included in the government’s National Key Economic Areas (NKEAs) programme.”
It highlighted that the RM40 billion industry had grown to meet the domestic market demands in the nation’s development programmes in a span of over 30 years. The relatively new flat steel industry had been plagued with multiple challenges for the past 14 years since 1998, partly due to a protection upstream but an exposed downstream policy.
Misif observed a renewed interest in the iron ore mining segment with the establishment of over 50 local iron ore mines.
On the trading end, Misif believed that Malaysia’s quest and haste in enhancing trade and investments between nations by liberalising the tariffs had created ‘some undue challenges for the industry’.
“The influx of under-specified and under-priced steel products have injured the local manufacturers. This is now affecting both the long steel products and severely affecting the flat steel products players.
“We urge the government to expeditiously act on the trade remedies that is needed. In this industry, the whole value-chain of the local industry has to be competitive if it is to ever compete against cheaper imports,” the statement added.
Misif stressed that the government’s policy should be to encourage the use of quality products, discourage the use of sub-standard and inconsistent grade products as well as to promote a greater use of Made-in-Malaysia steel products whenever possible.