Steel Industry Players Should Consider Industry Consolidation, Says Ong

PETALING JAYA (Selangor, Malaysia), Oct 14 (Bernama) -- Steel industry players should seriously consider consolidation as well as getting foreign partners for joint-ventures and collaborations. Second Minister of International Trade and Industry, Ong Ka Chuan, said the local steel industry must evolve to produce higher grade and higher value-added products to stay competitive and relevant. "The global outlook for the steel market is still uncertain especially with the surplus of world steel production. "To be sustainable and resilient, the iron and steel industry's value chain has to collectively reflect and rationalise the business," he said at the Malaysian Iron and Steel Industry Federation 2016 annual dinner here Thursday. This, he said, certainly required technology upgrade as well as consolidating some of the businesses. "The industry can no longer rest on its laurels and hope for the government to continue providing some level of protection while industries in other countries are moving up the value chain. "As you all know, the Malaysia Steel Institute is currently engaging various players on this industry consolidation effort and I hope all of you will contribute and move forward with consolidation among yourselves," he said. Ong said the last few years had been challenging for the domestic iron and steel industry due to the influx of imports, which saw the government made several policy changes and improvements to assist the industry. Among the changes were maintaining the import duty of 15 per cent on flat products up to 2019 and implementing the duty drawback facility for importation of raw materials to produce finished goods for export purposes. However, Ong said, one of the world major steel producers decided to undertake supply-side reforms earlier this year to address the excess capacity in the steel and coal industries, leading to an increase and recovery in global steel prices. He thus urged industry players to work together to strengthen the value chain and increase local consumption which required trust, compromises and positive considerations by all parties. "This has always been the government's message to the industry, whereby there is a need to balance the needs and concerns of all players. I hope all of you can work together to find a win-win solution for the good of the industry," he said. -- BERNAMA