KUALA LUMPUR: The Malaysian Tin Can Manufacturers Association (MTCMA) is up in arms over the petition by Perusahaan Sadur Timah Malaysia (Perstima) to the Ministry of International Trade and Industry (Miti) to impose anti-dumping duty on imported tinplate from China and South Korea.
MTCMA committee chairman for anti-dumping, Datuk Anthony See, claimed Perstima has been receiving government protection for too long and has monopolised the electrolytic tinplate market for the past 30 years.
“Perstima’s monopoly has led to tinplate being priced at US$100 (RM315) to US$200 higher locally, forcing local tin can makers to import tinplate from South Korea, China, Vietnam, Germany and India at an average global price of US$1,100 to US$1,200 per tonne,” he told a media briefing yesterday.
See claimed that Perstima is not only selling the raw material at a higher price, it also plans to further increase it. “If the anti-dumping duty is implemented, the end-users or consumers will feel the pinch as the prices of canned goods will increase by at least 10 sen per can,” he said.
Perstima is the only Malaysian company producing electrolytic tinplate, the raw material for the production of tin cans. In February, Perstima filed a petition requesting the government to impose anti-dumping duty on imports of electrolytic tinplate from China and South Korea.
Perstima had alleged that imports from China and South Korea were being dumped in Malaysia at lower prices than in these two countries. As a result, the company claimed that it had suffered in terms of “price undercutting, price depression, loss of market share, reduction in domestic sales, decline in profitability and inability to raise capital”.
Miti has initiated an investigation into the matter and is expected to complete it by June 19. The current import duty on electrolytic tinplates is 5%, down from 25% at the initial stage.
The uproar over Perstima’s petition is akin to a petition by Lion Group Bhd-owned Megasteel Sdn Bhd in 2011. It requested the government to impose an additional 35% duty from 25% on imported hot rolled coils (HRC).
Megasteel, the only HRC producer in Malaysia, claimed it was hurt by dumping from foreign countries. HRC is used in the fabrication of many steel products, which in turn form the critical raw material for many other finished products, especially in the electrical and electronics industry
The petition by Megasteel led to local and foreign downstream steel players banding together and preparing a complaint to the World Trade Organisation. The issue is still pending.
See claimed that Perstima only sources all its raw materials from its Japanese shareholders (JFE Steel Corp and Nippon Steel) as it is “obligated in the joint-venture agreement to support its parent company”. JFE Steel and Nippon Steel collectively own 67% of Perstima.
“Our members are still buying almost 70% of our raw materials from Perstima while 30% is imported. The reason why we import is because South Korea and China give us lower prices than Perstima,” See said.
The association said it is considering to build its own tinplate manufacturing plant if the government goes ahead in implementing the higher anti-dumping duty on imported tinplate. See said the association has been talking to several parties on the matter but nothing has materialised to date.
Miti deputy secretary-general (trade), Datuk Dr Rebecca Fatima Sta Maria, said the ministry will be fair in its investigations.
“It does not mean it is a monopoly. We will do the necessary investigation and it will be a fair process,” she told The Edge Financial Daily.
Sta Maria advised MTCMA not to “jump the gun” as investigations would take about 120 days. A decision on the anti-dumping duties cannot be made without going through the proper channels, and “it needs to be brought up to the minister”, she said.
This article first appeared in The Edge Financial Daily, on June 12, 2013.