Kuala Lumpur, 25 August 2011 - MegasteelSdnBhd would like to refer to the announcement by the Ministry of International Trade & Industry (MITI) on its preliminary determination with regard to the investigation on Hot Rolled Coils (HRC) imported into Malaysia. The announcement states that there was an increase in imports by 35% during the period of injury determination i.e. from 1 January 2010 to 30 September 2010 but the increased imports have not caused or threaten to cause serious injury to the domestic industry.
Megasteelexpresses its disappointment over the Government’s announcement not to implement safeguard measures in the face of rising imports which have severely affected the company’s operations and performance as submitted to the authorities. This is posing hardship to the 4,600 employees in Megasteel and its sister companies in the Lion Steel Complex in Bantingas well as those employed in the downstream, supporting and ancillary industries. The company may have to start retrenchment if the situation continues. It will also jeopardise the company’s plans to invest further in upstream and expansion projects as well as the plans to invite foreign partners to invest in the Group’s steel operations.
Despite the existing import duty of 25% on HRC, a substantial amount of imports are coming in without duty i.e. 0% under Asean CEPT (Common Effective Preferential Tariff) and duty exemption given to qualified manufacturers. The rest include HRC by importers who manage to circumvent the duty structure. The 25% import duty is also levied on the downstream products i.e. Cold Roll Coils (CRC), Coated Sheets such as GI sheets, EG sheets and Colored sheets as well as Pipes and Tubes.
Megasteelunderstands that the Government is taking measures to strengthen the industry by plugging the loopholes and leakages taking place. This will put a stop to manipulations of imports and bring back the price and market stability to the HRC sector.Megasteel is also looking into other avenues like Anti-dumping to address the problem of excessive imports at dumping prices into the country.
Due to the non-level playing field created by Free Trade Agreements, many steel producing countries have imposed safeguard measures to protect their local steel industries. India, Indonesia and the Philippines are the most frequent users of safeguard proceedings in Asia, with 33, 11 and 9 respectively.
Indonesia has filed 11 investigations of which five are related to the steel industry. In particular, it has imposed anti-dumping duty of 48.46% on HRC from Malaysia and six other countries, as well as safeguard measures on steel wire nails and steel wire ropes. It has also tightened its industrial standards as non-tariff barriersagainst steel imports.
Thailand has imposed anti-dumping on HRC from 16 countries, including Malaysia with a duty of 23.57%, besides enforcing its industrial standards as a non-tariff barrier.
The implementation of all these measures by Indonesia and Thailand has in fact created a conducive and stable environment, attracting foreign investments into their steel industry by major steel mills such as Posco, Nippon Steel, Wuhan Steel etc.
Megasteelwill discuss with the Government on how it can build a supportive environment for the local steel industry to grow, upgrade and expand in the interests of both the upstream and downstream industries.
Released by MegasteelSdnBhd
For further information, please contact Ms Quah Le Ching, Corporate Communications Department at tel no. 03-21420155 ext 2505 or fax no. 03-21428409.