“We had two companies before that used to produce hot rolled coils (HRC) but both of these companies stopped production due to various reasons.
“To produce HRC, you will need bigger economies of scale while the technology involved to produce HRC is also more complicated than construction steel (rebar),” Lim said.
“We need time to learn how to produce the higher grade products such as automotive steel and oil & gas industry grade steel. Unfortunately due to various issues such as internal: company issues and also external such as the 2013-2015 dumping from China had really weakened the financials of the steel companies here,” he added.
Speaking to the press after MISIF’s conference on the status and outlook of the domestic iron and steel industry, Lim said he hoped the government will be able to come up with a holistic approach to ensure the basic needs of the industries are taken care off.
“We are not asking for full protection but certain measures need to be put into place in case of a predatory price dumping from foreign imports happen and try to kill of the local industry.
“Then they will need to step in otherwise this industry will not grow,” he said.
In his speech to industry players earlier, Lim said that the steel industry and the government shares the same aspiration that industry consolidation is key in enhancing the industry’s competitiveness to create a sustainable steel sector.
“We hope that the government could seriously consider and expedite the process by providing the incentives, either in the form of tax relief or tax allowances and relocation incentives. We look forward to the announcement from the government soon,” he said.
Asked if the government was prepared to give incentives to industries to move up the value chain in the face of Industry 4.0, deputy minister of international trade and industry affairs Ong Kian Ming said that the details of this will be outlined in the upcoming Budget 2019.
He also said that the government was monitoring the US-China trade war for possible dumping of steel products in Malaysia.
“There is also this possibility of other countries using Malaysia as a transshipment point. All these cannot be ruled out as it will have detrimental effects to the country and including to the steel industry,” Ong said.
“If people dump here then our local players will be affected.
If Malaysia is used as a transshipment point then there will be anti-dumping measures enacted against Malaysian steel companies by other countries against us,” he added.