MITI moots merger of steel industry bodies to strengthen industry - MIDA | Malaysian Investment Development Authority
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MITI moots merger of steel industry bodies to strengthen industry

MITI moots merger of steel industry bodies to strengthen industry

18 Apr 2024

The Ministry of Investment, Trade and Industry (MITI) is calling for a review of the roles played by the Malaysia Steel Association (MSA) and Malaysian Iron and Steel Industry Federation (MISIF) for a potential merger of the two bodies to strengthen the steel industry as a whole.

MISIF is the association for flat steel players, and MSA is the body for long steel players.

MITI views the iron and steel industry as a strategic sector and continues to be committed to improving the industry in accordance with the New Industrial Master Plan (NIMP 2030), said its deputy minister, Liew Chin Tong.

“MITI looks forward to working with industry players to create a more sustainable, dynamic, and internationally competitive iron and steel sector,” he said in his speech at the recent Malaysia Steel Council (MSC) meeting.

According to Liew, the capacity of steel production in Southeast Asia is expected to increase from 75.3 million tonne in 2021 to 151.9 million tonne in 2026 if all potential investments materialise.

He said that Malaysia has raised the issue of overcapacity in the steel industry in Southeast Asia at the ASEAN Economic Ministers’ Retreat in March 2024, and the ASEAN Secretariat has agreed to elevate this agenda for ASEAN-wide discussion.

A number of important issues concerning the iron and steel sector were discussed, including enforcing government procurement (GP) in construction projects, where local content is mandated at the main contractors’ stage to permeate through the supply chain with the objective of safeguarding the ringgit, enhancing the local supply chain, and ensuring compliance with the local content requirement (LCR).

The other areas include strengthening enforcement by relevant authorities to ensure compliance with export declarations for steel scrap, which are subject to a 15 per cent export tax, Liew said.

“This measure aims to prioritise the use of scrap for local steel mill consumption, thereby bolstering domestic production and reducing reliance on imports, which will contribute to the sustainability and growth of the local steel industry,” he said.

Another key area of focus involves preventing the evasion of imported flat steel and ensuring fair trade practices within the industry.

Liew, who is the chairman of MSC, stressed the significance of implementing comprehensive measures to identify and tackle any attempts to circumvent trade regulations or tariffs.

This includes closely monitoring import activities, conducting thorough inspections of documentation, and working closely with relevant authorities to investigate suspicious transactions, he pointed out.

Moving forward, Liew underscored the collaboration between MITI, the Malaysia Steel Institute, and MSC members to adopt a carbon emission reporting method.

This initiative is set to roll out across the industry in the latter half of 2024, representing the initial stride towards carbon pricing, trading, and taxation.

Meanwhile, Liew observed notable progressions since the preceding Council gathering on July 13, 2023.

These include the establishment of the Independent/Special Committee (ICS) for the Iron and Steel Industry in Malaysia and the imposition of a moratorium on new steel investments.

Additionally, significant strides have been made in addressing steel overcapacity within ASEAN, implementing measures to ensure equitable competition in the steel sector, and instituting a framework for carbon reporting through the Independent/Special Committee for the Iron and Steel Industry in Malaysia.

Source: NST