KUALA LUMPUR: Malaysian Steel Association (MSA) is urging the government to tighten enforcement of imported steel products that do not conform to regulations and standards.
"We urge the government to prohibit imports of sub-quality steel products," said its president Tan Sri William Cheng.
Cheap imports pose a threat to Malaysia's upstream steel industry, he said, adding that steel milling is a strategic activity that enables the country to be self-sufficient.
He noted that managing a steel manufacturing business is never an easy task as the industry is laden with high capital outlay, rising costs of steel and steelmaking raw materials, and costs of research and development initiatives for specialised high-grade steel products.
In facilitating more reinvestment in the steel sector, MSA advocates that the government ensures fuel costs, such as natural gas and electricity, remain at internationally competitive levels.
Formed in November 2010, MSA members are Amsteel Mills Sdn Bhd, Ann Joo Steel Bhd, Ann Joo Integrated Steel Sdn Bhd, Antara Steel Mills Sdn Bhd, Kinsteel Bhd, Malaysia Steel Works (KL) Bhd, Megasteel Sdn Bhd, Perfect Channel Sdn Bhd and Perwaja Holdings Bhd.
Separately, Malaysian Iron & Steel Industry Federation (Misif) president Datuk Soh Thian Lai concurred with MSA in urging the construction and housing sectors to use more locally made steel products.
Misif, established more than 30 years ago, is made up of 140 members operating businesses throughout the steel supply chain.
"We urge the government to specify more usage of steel bars and steel sheets, especially in government-initiated mega infrastructure and property projects," Soh said in a statement.
He highlighted that the steel industry consumes a lot of energy, such as electricity, fuel and gas. These are essential utilities for making steel, be it long or flat products.
Misif noted that public debt had surged to 54 per cent of the gross domestic product, and that the drop in consumer confidence index and inflationary pressures are worrying.
Soh said he understands and acknowledges that the government needs to ultimately remove fuel subsidies.
Fuel subsidy reduction should be staggered so that the higher costs can be gradually absorbed into the steel pricing, he added.
"The industry needs a time frame of six to 12 months to factor in and pass on the cost increases," Soh said.
Both MSA and Misif expressed a similar view that the government, in widening its income base, must have a proper outline on the implementation of the goods and services tax, citing that a clear timeline is necessary for business preparation.