Megasteel disappointed with Miti’s decision

KUALA LUMPUR: Megasteel Sdn Bhd says it is disappointed the Ministry of International Trade and Industry (Miti) has decided against implementing the 35% safeguard duty on the import of hot-rolled coil (HRC) the steel giant had petitioned for in June.

“Megasteel expresses 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,” the company said in a press statement released Thursday Aug 25.

In its announcement on Monday, Miti said although there was an increase of 35% in HRC imports during the period of injury determination, from Jan 1, 2010 to Sept 30, 2010, the increase “neither caused nor threatened to cause serious injury to the domestic industry”.

In its statement yesterday, Megasteel said without the safeguard measure, the company’s health could be impaired and it could “jeopardise the company’s future plans to further invest in upstream and expansion projects as well as dishearten possible foreign investors from investing in the group’s operations”.

While the group remains disappointed, it expressed its understanding of the government’s need to strengthen the local HRC industry. It is currently looking at other avenues, such as the problem of excessive importing of HRC at dumping prices.

In its statement, Megasteel listed various Southeast Asian countries whose governments have taken measures to safeguard their local steel industries, especially with free trade agreements supposedly creating a non-level playing field.

It named in particular Indonesia and Thailand for the measures they have taken to create a conducive and stable environment which resulted in both countries attracting investments from foreign steel players such as Posco, Nippon Steel and Wuhan Steel.

“Megasteel will discuss with the government 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,” said Megasteel.

In a separate announcement, Megasteel’s parent Lion Corp Bhd yesterday reported a loss of RM45.1 million for 4QFY11 ended June 30, from a net profit of RM60.4 million a year ago. This brings full-year net loss to RM234.4 million, more than double FY10’s losses of RM112.8 million.

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