Message from Secretary General_May 2015

Posted on 10 June 2015

Source: SEAISI
The 2015 SEAISI Conference and Exhibition was successfully held at Sofitel Philippine Plaza Manila, Philippines from 25 to 28 May 2015. Despite the prevailing difficult business conditions, the event managed to attract a large turnout of some 450 delegates from 25 countries.

The opening day of the event featured three prominent keynote speakers who delved into the theme of the conference i.e. "Creating and Delivering Value in ASEAN Steel Industry". They are Mr. T.V. Narendran, Managing Director of Tata Steel (India and South East Asia), Mr. Steve Hamer, Chief Executive of Arrium Steel Australia and Dr. Edwin Basson, Director General of World Steel Association.

Mr. Narendran, in his keynote presentation, advocated the adoption of different strategies to address the different characteristics, geographies and segments of the ASEAN steel industry. His proposals on value creation actions included industry consolidation; geographic specialisation; focusing on countries with low per capita steel consumption; striving for operational and retail excellence; and industry working together for skill development. He further suggested two levers to harness the opportunities and create value, which are innovation and vertical and horizontal collaboration. He then concluded by putting forward several proposals for policy makers to move the ASEAN steel industry forward in a sustainable manner.

The next keynote speaker, Mr. Steve Hamer, nicely complemented Mr. Narendran's ideas on value creation with the example of Arrium Steel's integrated value chain where the company uses its expertise in steel manufacturing, sales, logistics, supply chain and logistics to deliver a safe, fast, flexible and reliable product to all its customers. He emphasised on the importance of creating and delivering value through delivering a proposition that adds value, maintaining a competitive cost position and using safety as a shared value.

It was then left to Dr. Edwin Basson to provide a global perspective to the concept of value creation. In the context of the global steel industry facing the new challenge of low growth, Dr. Basson concurred with the idea that future regional strategy could focus on creating and delivering value. In this connection, he was of the view that using steel in downstream activities could be equally value-adding than steelmaking strategies. He further noted that in order to deliver sustainable returns from value chain, appropriate focus must be placed on training and development, building collaborative producer relationships as well as ensuring stable supply relationships.

After the keynote presentations, the three keynote speakers were joined by Mr. Roberto Cola, Chairman of SEAISI, and Dato' Soh Thian Lai, President of the Malaysian Iron and Steel Industry Federation (MISIF) for a CEO Panel Discussion. Moderated by Mr. Jason Ellis, SEAISI Director for Australia, the session saw a lively exchange of views among the panel members and conference delegates on ways to create and deliver value in the ASEAN steel industry. Among the topics raised and discussed were ways to increase steel intensity, using ICT to create value in steel industry, the role of steel futures and steel's role as a collaborator and solution provider. Of course the discussion also could not avoid the hot topic of the increasing instances of trade measures on steel products instituted by many countries across the globe. The general consensus was that while such actions are necessary to address unfair trade practices, they should not be prolonged.

In the session on "Regional Developments", delegates were updated on the developments of the iron and steel industry in ASEAN as well as in the region's two most important neigh bours – China and India.

The three papers presented in the session on "Strategic Challenges and Opportunities" all have themes that touched on the "China factor". In his presentation on "ASEAN Options in the Face of a Slowing China", Dr. Paul Butterworth of CRU made a bold prediction that cost competitiveness of the Chinese steel industry verses ASEAN would deteriorate over the next five years and that steel exports from China could, potentially, fall back. His view was, however, not shared by Mr. Atilla Widnell of Metal Bulletin Research. Presenting his paper on "Impact of Raw Material Costs and Chinese Steel Exports on Southeast Asian Steel Markets", Mr. Widneel pointed out that the disparity in the extent of decline in the prices of scrap and iron ore compounded by cheap Chinese imports had resulted in historically low margins for ASEAN steel makers and he foresaw further deterioration in margins over the next few years. Similarly, Mr. Sebastian Lewis of Platts, in his presentation on "Will the Rebalancing of China's Economy See an End of Steel Exports to ASEAN?" also did not give any clear indication that Chinese steel exports to ASEAN would ease any time soon.

As in the previus years, the presentation of Country Reports by represenataives of the nine member countries of SEAISI was very well received by the delegates. In addition, a total of 75 papers covering such topics as Quality Improvement, Raw Materials, Operation Excellence, Process Improvement, Technology Development, Product Development, Environmental & Safety Mangement, New Technology and Energy & Cost Reduction were delivered over 15 sessions on the second and third day of the conference.

All in all, the 2015 SEAISI Conference and Exhibtion in Manila, Philippines was a great success. The Institute would like to convey its deepest appreciation to the co-host of this year's event, the Philippine Iron and Steel Institute (PISI), all the speakers and chairpersons, all the exhibitors, sponsors and adverisers, all the companies that hosted the plant tour and all the delegates for your excellent support and participation.

The 2016 SEAISI Conference and Exhibition will be held in Vietnam. The theme will be "Innovating and Sustaining Competitiveness in ASEAN Steel Industry".

       TAN AH YONG

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