Malaysia’s Mycron Steel Bhd has agreed to continue buying 50% of its hot rolled coil from Megasteel Sdn Bhd and the other half from abroad provided three conditions are met.
International Trade and Industry Minister Datuk Seri Mustapa Mohamed has reportedly told Mycron in a meeting earlier this month that the Government would still require it to procure hot rolled coils (HRC) from Megasteel, the country's sole producer of the material, and import the rest, which is the current practice. Megasteel is owned by the Lion Group and Mycron Steel by Mycron Steel Bhd.
The decision is said to have been a blow to local cold-rolled coil (CRC) makers as most steel players are in the red, with industry utilisation rates at a paltry 31%.
Mycron chairman and major shareholder Tunku Datuk Yaacob Tunku Abdullah said, after the company's AGM on 13 December 2012, that it had agreed in principle with the ministry based on three conditions: consistency of product quality from Megasteel; a reduction in duty-exempt CRC imports; and an independent audit to ensure that Megasteel does not enjoy any transfer pricing advantage between its upstream and downstream operations.
Although the final decision rests with the minister, Tunku Yaacob said he was optimistic Mycron's conditions would be met. The Economic Council has also given its consent to the policy.
Source: Daily ‘The Star’, Kuala Lumpur; 14 Dec 2012