Forging a New Path for SE Asia

Posted on 03 May 2007

Source: Steelweek

Tan Ah Yong, the new Secretary General of the South East Asia Iron and Steel Institute, discusses the changes to trade and investment expected in the region, and plans for cooperation between its six member countries.

SW: How do you view the South East Asian iron and steel industry in the context of the major projects being developed in China and India, and the mergers and acquisition in other regions such as Europe?

TAY: Mega mills in China and India cater to much larger markets while mergers and acquisitions in Europe and elsewhere are a natural evolution. In contrast, the South East Asian iron and steel industry is limited in its size for it is catering to the regional niche markets. Within this context, I see the prospects of some regional players growing to a size of 3-5mt/y capacity per mill. They will be able to cater to the regional demand that is forecast to maintain healthy growth trends within each SEAISI member countries — Indonesia, Malaysia, Singapore, Thailand, Philippines and Vietnam.

A number of SEAISI member countries are also endowed with natural resources, such as natural gas, which would be good for developing Direct Reduced Iron (DRI) projects as the option of switching to blast furnace is currently not supported by proven regional resources [namely metallurgical grade coal or iron ore].

SW: What role will SEAISI play with a number of trade agreements taking shape: the Asean Free Trade Agreement, the growing numbers of FTAs being signed by Asean as a unified group as well as bilateral FTAs among and between its member countries and other markets?

TAY: First of all, I need to point out that SEAISI is a technical institute and as a rule it does not get itself involved directly in the deliberation of trade issues among its member countries. In the Asean context, the Asean Iron & Steel Industry Federation is more directly involved in such issues. Having said that, I also need to mention that the Institute is, nevertheless, conscious of the possible impact of the various multilateral and bilateral FTAs on its member companies.

Through the various technical programmes undertaken by the Institute, the members are exposed to the latest technological developments affecting the industry. It is hoped that these will help them to improve their efficiency and competitiveness and thereby enable them to be in a better position to face the challenges and also take advantage of the opportunities brought about by the changing global trade environment.

SW: What experiences can you draw on from your previous post to address the issues facing SEAISI members, such as barriers to free trade?

TAY: Having worked in the Malaysian Industrial Development Authority (MIDA) for the past three decades and to a position of deputy director general, I plan to help SEAISI members progress in the competitive and borderless trading environment. On many occasions while in MIDA I handled industry and tariff related issues affecting the iron and steel industry in Malaysia. I was also involved in different capacities in the promotion of investment in the manufacturing and manufacturing-related service sectors in Malaysia. Naturally, I have the advantage of looking afresh at SEAISI and its growing regional role.

SW: Will there be a major change in SEAISI’s long-term goals?

TAY: The South East Asian iron and steel industry is in a healthy trade environment with a good level of earnings which would help the industry progress further. The team at SEAISI will lend full support to members to further improve the qualities of their products and services to the rapidly expanding markets.

SW: SEAISI will end the secondment of officers from all supporting member countries (Australia, Japan, South Korea and Taiwan) from August this year. Will this impact the operations of this institute?

TAY:The members from the supporting countries of Australia, Japan, South Korea and Taiwan have been very supportive of SEAISI and its members, both financially and technologically. Though the secondment of officers will cease from August this year, they will still continue to provide the necessary technical support through participation in conferences, seminars and workshops organised by the Institute. They will also maintain the ongoing training programme for the South East Asian member companies.

SEAISI has been generating its own revenue to support its operations in the past and we will continue to do so through our ongoing programmes which include seminars, forums, conferences and publication of journals, annual reports and directories. We will also be working on compiling quarterly data on production, apparent consumption, export and imports as well as other trade movements.

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