Greetings from SEAISI. Mr. Tan Ah Yong retired end of October and I have since taken charge of SEAISI. Let me briefly introduce myself.
I have been in the Steel Industry for a couple of decades. My experience during my time with NatSteel, Singapore, was in two main areas:
- Corporate strategy, market research, strategic / feasibility studies, M&A, corporate planning, government relations
- General management of both local and overseas business units for steel fabrication and supply chain management
In addition to my work at NatSteel, I was also the Secretary of the National Committee (Singapore) of SEAISI for more than 4 years. I have actively participated in the various SEAISI Committees, an experience that can be described as eye-opening and fulfilling. Even prior to my term as the Secretary, I have been participating in SEAISI events as a delegate and a speaker for years.
Now that I am in SEAISI, I hope to continue to build SEAISI to add further value to all stakeholders. More details on the new SEAISI direction in the next issue of the newsletter.
The 2019 SEAISI Forum
The 2019 ASEAN Iron and Steel Sustainability Forum was held in the Ritz Carlton Mega Kuningan, Jakarta, Indonesia from 25 to 27 November 2019.
In his opening address, Mr. Win Viriyaprapaikit, Chairman of SEAISI, highlighted that with the new SEAISI direction, change is on the way. The first is SEAISI has a new Secretary General,
Mr. Yeoh Wee Jin. Mr. Yeoh, with experience in the steel industry will focus on bringing SEAISI forward. The second change being implemented can be seen in the forum, such as the special session on Indonesia and the emphasis on special content in the area of steel construction.
The Board of Directors has approved the new budget and strategic plan. More resources will be put in to support all the stakeholders to move forward so to make the steel industry sustainable, relevant and of value to everyone.
In his welcoming speech, Mr. Silmy Karim, Chairman of the Indonesian Iron and Steel Industry Association (IISIA) spoke about the Indonesian steel industry:
- The steel consumption of Indonesia rose 11% to 15.1 million MT in 2018, due to growth of steel consuming sectors.
- However, demand is largely served by imports from China and other countries.
- The Indonesian Government has introduced policies to counter the impact of unfair trade and circumvention.
- A few steel industry clusters are being further developed to satisfy the growing demand. The one in Cilegon, led by Krakatau Steel and Krakatau Posco that will have 10 million MT capacity in the near future. Another is the 3.5 million MT Morowali cluster in Sulawesi.
Our keynote speaker is Mr. Dody Widodo, Senior Advisor To Minister For Deepening, Strengthening And Spreading Of Industry at the Ministry Of Industry. The key highlights are:
- The Indonesian Government is targeting a GDP 5.3-5.5% and construction growth of 5.68-5.72%.
- Steel is one of the contributors to the trade imbalance due to large quantities of imports
- The major steel consuming sector is construction (78%), followed by automotive sector at around (8%), Oil & Gas (7%).
- The Steel Industry Development Map targets to achieve a number of objectives in 2035, including a national crude steel capacity of 25 million MT using proven technology, developing the manufacturing industry to strengthen competitiveness and efficiency and producing high value steel products for the automotive, shipbuilding, manufacturing and machinery sectors .
- Many infrastructure projects are expected to complete in 2019, with many more coming up, especially to support industrial development outside of Jawa island.
The special session on Indonesia has four speakers, who discussed the wide-ranging topics on Indonesia, which includes the Indonesian Economy, Infrastructure Projects and Development and Steel Construction Engineering. The takeaways are:
- Apparent steel consumption for H1 2019 reached 7.2 million MT, up 6% from a year ago. Consumption is expected to reach 16.2 million MT in 2019 and eventually hit 22.7 million MT in 2024.
- Construction remains the largest steel consuming sector and will continue to grow. with many upcoming infrastructure projects
- However, the steel industry remains in an overcapacity.
- Indonesia continued to import significant amount of steel from China, especially sections, CRC, plates, wire rod and HRC.
- Proliferation of Induction Furnace is has resulted in unfair competition, quality issues and environmental issues. The Minister of Public Works has issued a letter concerning the quality of steel produced.
- The Indonesian Government is committed to control and restrict importation of steel product to prevent unfair trade.
The session on “Steel Market Developments” saw speakers from SEAISI, Iron & Steel Club of the Federation of Steel Industries, Kallinish and Mysteel covering topics on the ASEAN Steel Industry, ASEAN Construction Sector, Global Capacity and Trade Issues and the China Steel Industry. The key points are:
- ASEAN steel consumption for H1 2019 is 39.2 million MT, up 5.9% from last year. Total 2019 steel consumption for ASEAN is projected to reach 83 million MT
- ASEAN construction sector demand reached 58 million MT in 2018, up 17.8% from 2014. Many mega construction projects across the ASEAN region will sustain continuing steel demand growth in the near future
- Many proposed integrated steel projects in ASEAN will lead to a serious overcapacity and it will take about 20 years for ASEAN steel consumption to catch with all these capacities.
- Globally, capacity growth could outpace demand growth, leading to export growth and eventually to narrow margins.
- China’s GDP is slowing but steel consumption is still up mainly due to mismatch of supply and demand with oversupply in the flat steel sector while undersupply is ongoing in the long steel sector
- China is actively pursuing the supply reform in the steel industry through various policies on environment and on the steel industry
· The Chinese steel mills are gearing up to meet the new emission standards and requirements of the government. They are upgrading their facilities, restructuring their businesses, growing via mergers & acquisition, strategic positioning and reaching out to customers more effectively
The remaining sessions in the Forum were on the Construction and Construction related topics. The topics covered in the sessions were “Development on Building Construction System”, “Development of Materials and Steel Products for Construction Sector”, “Smart Factory Technologies for Steel Manufacturer”, “Higher Value Delivery Through Digitization and Internet of Things” and “Steel Construction - Material, Technology and Design for Natural Disaster”.
The plant tour after the Forum attracted about 25 participants who visited the facilities of PT Bukaka Teknik Utama Tbk, a steel fabricator producing steel towers, boarding bridges, steel bridges and various galvanize products and PT Bukaka Forging Industries, a manufacturer of automotive parts.
SEAISI would like to thank the Indonesian Iron and Steel Industry Association (IISIA) for its support and cooperation in co-hosting this year’s event in Jakarta, Indonesia. To all delegates, speakers, chairpersons and the hosts of the site tour, we thank you for your support and participation.
The 2020 SEAISI Forum will be in Myanmar
For the first time, the 2020 SEAISI Forum will be held in Myanmar, a country often viewed as a mystic land shrouded in mystery.
Myanmar is the second largest country in ASEAN occupying a land area of 676,600 sqm. With 54 million in population, the Myanmar market is huge, presenting opportunities for both local and foreign investors to participate in the country’s development.
This SEAISI forum will include a special session on Myanmar, covering the country, its economy, the construction industry, investment and other topics of interest. SEAISI will also work on bring you the relevant topics on construction, steel materials and other interesting content.
The forum will be useful for:
- Delegates who are interested in the country and its development
- Potential investors seeking opportunities related to the steel and construction industry in Myanmar
- Exhibitors who are looking at providing their equipment and technology to industry players
We will keep you posted on the details and development on the 2020 SEAISI Forum in Myanmar. I hope to see you there.
YEOH WEE JIN