Monday 17 Jun 2024
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This article first appeared in The Edge Financial Daily, on December 9, 2016.

 

KUALA LUMPUR: Mycron Steel Bhd said it is currently assessing new markets to export its steel tube products, and is considering the UK, US and emerging countries as potential export destinations.

Group executive chairman Tunku Datuk Yaacob (pic) said exports currently make up a negligible portion of its sales, mainly due to Mycron previously having to acquire hot rolled coils (HRC) — the raw material for its cold rolled coil (CRC) products — from Lion Group’s Megasteel Sdn Bhd.

“In the previous days when Megasteel was still around, we had to buy all our raw materials from Megasteel. It was very expensive, making us uncompetitive when it comes to exporting.

“Since they have stopped operations, we can now begin to consider exporting pipes as we can purchase HRC at competitive prices and hence sell at competitive prices,” he said following Mycron and Melewar Industrial Group Bhd’s annual general meeting yesterday. Melewar is the holding company of Mycron. He said the company is also looking to export CRC.

The company previously hoped to benefit from the Trans-Pacific Partnership (TPP) agreement to export its products to the US. “We were hoping that with the TPP coming into force, we could sell our pipes and CRC to the US. But it looks like that is not going to happen,” he said.

However, he said, exporting to the US is still possible, considering the country’s reasonable import duty of 6.2%, which means the US market is still worth considering.

Besides the US, Mycron is looking at exporting steel pipes to the UK, and is eyeing to secure a contract for works related to the Malaysian-owned Battersea Power Station project.

“Right now, we only have very small revenue contributions from foreign markets, but that’s an opportunity for the company. We’re looking at the US, Europe and any other emerging countries that may have opportunities for exporting to, or even potentially setting up operations. We are actively studying different markets,” said Mycron chief operating officer Roshan Abdullah.

However, Roshan said the company will not be able to export in big quantities, as Mycron is operating at almost full capacity. However, he said the company will consider expanding its capacity if exports pick up. “If there is strong demand coming from foreign markets, definitely we would consider to expand. We will think about it when the time comes,” said Roshan.

He said the company is currently producing 205,000 tonnes of CRC per year, out of its total capacity of 250,000 tonnes per year. Its steel pipe production currently operates at 8,000 tonnes per month versus its total capacity of 18,000 tonnes.

Meanwhile, the company lauded the anti-dumping measures introduced by the government in May this year — when it imposed anti-dumping taxes ranging between 3.06% and 23.78% on certain CRC manufacturers from China, Vietnam and South Korea. Mycron said the move is beneficial to the local steel industry as it keeps speculators and low-quality raw materials away.

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