PETALING JAYA: The government believes the domestic steel industry is on track towards a strong rebound with the implementation of large infrastructure and construction projects under Budget 2011.

Prime Minister Datuk Seri Najib Razak said the government would continue to assist the steel industry to ensure that it was more competitive.

He said the government would continue to hold frequent dialogues and review policies governing implementation of public sector infrastructure and construction projects and on the roll-out of construction plans announced under the stimulus packages and Budget 2011.

"Since Malaysia has huge reserves of iron ore and coal relevant to steel-making, the Federal Government will help to encourage States with iron ore and coal reserves to allocate more land of economic size to the local steel manufacturers to undertake commercial mining to enhance their steel-making operations," he said in his speech at the launching of Malaysia Steel Association.

The text of his speech was read out by the Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop.

Najib said the government would do its utmost to assist domestic industries to enhance their competitive edge wherever possible, including helping them to secure supply of locally available materials such as scrap required for steel-making.

In this regard, the government would study the duty structure for iron ore and also for scrap with a view to making available the supply of such essential raw materials for the priority use of the local industries, he said.

"Given the high consumption of electricity by the steel mills and dependence on natural gas as a feedstock for their iron-making operation, I take note of the mills' request for the government to set tariffs that are comparable to neighbouring countries and countries producing natural gas, respectively, in order to create a level playing field for our steel industry.

"I will also get the relevant authority to look into the request to extend off-peak hours rate to Saturdays, Sundays and public holidays," he said.

The prime minister also said the government would continue to support steel manufacturers to further compete locally and internationally. He said the government had always supported the practice to buy local and would certainly encourage government and quasi-government projects to use locally-manufactured products and fabrications.

"This will not only save foreign exchange for the nation, but also assist local mills to utilise their production capabilities which will help them achieve better economies of scale," he said.

On dumping of cheap imported steel in the Malaysian market, Najib said the government was committed not to allow sub-quality steel products to be dumped into the country.

He said the government would ensure the relevant authorities take appropriate measures through enforcement of rigorous quality standards on both imports and domestically produced steel products to prevent the market from being flooded with sub-standard materials.

On the formation of the Malaysian Steel Association (MSA), Najib said it was in line with the "Glocal" concept, think globally and act globally.

"I am confident the coming together of so many esteemed companies which have so much experience and expertise in the Malaysia's steel sector to greater heights and able to be in a better position to compete with the bigger players in the international arena," he added. — Bernama
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