Masteel sees more Govt jobs under 10MP

Malaysia Steel Works (KL) Bhd (Masteel) expects the bigger project value under the 10th Malaysia Plan (10MP) to boost its business from the Government sector to 25% within the next five years from 15% currently.

Managing director and chief executive officer Datuk Seri Tai Hean Leng said the 52 high-impact projects worth RM63bil earmarked for 10MP was substantially higher compared with the RM33.1bil allocated under 9MP.

“Steel consumption is expected to grow steadily over the next five years. If 10MP can materialise, (contribution from) the public sector could increase to 20% to 25%,” he said at a briefing yesterday.

Tai said jobs from the private sector currently contributed about 85% of Masteel’s business.

“These jobs comprise commercial and housing projects,” he said.

Tai said Masteel was involved in projects within the Iskandar Region but declined to elaborate.

“We are a supplier to the region. Last year, there has been an uptake in demand (for steel),” he said.

Tai said the projected 5% growth in domestic steel demand at the Malaysian Iron and Steel Industry Federation conference recently would augur well for steel companies.

“With Masteel’s increase in production capacity for 2010 to 500,000 tonnes from 450,000 tonnes, we expect a 10% export growth this year.”

According to Tai, Masteel exports its finished products to Australia and New Zealand while its semi-finished products were sold to countries such as Vietnam, Indonesia and Thailand.

He said there was a misconception that the higher iron ore prices currently would squeeze Masteel’s margins.

“The rise in iron ore and coking prices have no impact on Masteel’s production costs because the company uses prime steel scraps as its main raw material.

“The strengthening of the ringgit will also help in reducing the cost of importing steel scraps from overseas,” he said.



By EUGENE MAHALINGAM

eugenicz@thestar.com.my