VOLUME 26 ● ISSUE 1 ● JANUARY – MARCH 2015

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RESTRICTED CIRCULATION ONLY TO MEMBERS OF MALAYSIAN IRON AND STEEL INDUSTRY FEDERATION (COMPANY NUMBER 76350P)

Berita A Quarterly Newsletter of Malaysian Iron & Steel Industry Federation

MISIF Holds EGM MISIF held an Extraordinary General Meeting on 18 March 2015 in the MISIF Training Room, Shah Alam for the purpose of transacting the special resolutions to amend the Memorandum and Articles of Association of the Federation.

MISIF President, Dato’ Soh Thian Lai in his speech informed that the additional Deputy President and Vice President’s posts was needed to cater to the future needs of the Federation as MISIF had grown in membership and stature. Such changes were also necessary to reflect its development and growth when more MISIF regional branches were formed. Currently, MISIF had officially established the Northern Regional Branch while the Central Region Branch had

scheduled its first AGM in April 2015. The Southern Region Branch would also be having its inaugural election of the Pro-term Committee the same month. The number and regularity of wide-ranging internal, external and regional meetings had also increased over the years. Trade issues had also become more challenging, complex and time-consuming to address, such as the influx of imports from China. Hence, MISIF needed more people to share responsibilities and be directly involved in the many issues and activities of the Federation. The two Deputy President’s posts would be essential to look after the interest of both upstream and mid/downstream sectors covering both flat and long products. The additional Deputy President and Vice President positions would also assist and support the MISIF President and the Federation as a whole in discharging their duties and responsibilities well and in a more efficient and effective manner. MISIF could also tap on the experiences, ideas and contributions from MISIF Past Presidents and other distinguished individuals and personalities as advisors. Hence, the President urged members to give their

utmost support and approval to the additions and amendments that had been proposed by the MISIF Council. The meeting agreed to the special resolutions to amend the Memorandum and Articles of Association of the Federation to include the following: • Honorary Advisor, • Honorary President, • Additional position of Deputy President

and • Two additional positions of Vice

Presidents.

Berita MISIF Committee/Editorial Committee Chairman: Mr. Pongsak Padungkarn Secretariat: Mr. Frankie Wee, Ms. Ng Mor Kiang

Published by Malaysian Iron & Steel Industry Federation 28 & 30E, 5th Floor, Block 2, Worldwide Business Park Jalan Tinju 13/50, Section 13, 40675 Shah Alam, Selangor, Malaysia Phone: 603-55133970 Fax: 603-55133891 Website: www.misif.org.my Email: enquiry@misif.org.my

Artwork & Design By MISIF Any materials extracted from Berita MISIF to be quoted or reprinted should contain an acknowledgement to MISIF or its acknowledge sources. No Permit PP16672/10/2012 (030924)

A total of 21 companies participated in the EGM and seven proxies were given.

MISIF 35th Annual General Meeting Announcement We are pleased to inform that the MISIF 35th Annual General Meeting will be held on 10 June 2015 at 12.00 pm in the MISIF Training Room, No 30E, 5th Floor, Block 2, Worldwide Business Park, Jalan Tinju 13/50, Section 13, 40675 Shah Alam, Selangor

In this Issue MISIF Holds EGM 1 Refining and Petrochemical Workshop 2 Dialogue with CIDB 2 GST Forum with Epicor 2 Briefing on Green Technology 2 ASEAN- China FTA Joint Committee Meeting 3 Electricity and Natural Gas Tariff 3 Appointments 3 Customs Duties Order 2014 3 Final AD Investigation on HRC 3 Forthcoming MISIF Events 4 New Members 4

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Dato’ Soh Thian Lai presenting the MISIF 11th Report on Status and Outlook of the Malaysian Iron and Steel Industry 2014/15 and MISIF 2014/2015 Directory to En. Megat Kamil Azmi Megat Rus Kamarani.

Ir. A.K. Woo, Chairman of MISIF Green Technology Committee presenting a token of appreciation to Pn. Norhasliza Mohd Mokhtar

Refining and Petrochemical Workshop MISIF with the support of Nickel Institute (NI) organized the Refining and Petrochemical Workshop on 29 January 2015 in Concorde Hotel, Shah Alam. A total of 40 participants attended the workshop conducted by NI consultant, Mr. Gary Coates who had worked with stainless steel and nickel alloy industry for over 30 years. MISIF Vice President and Stainless Steel Group Chairman, Mr. Mark Lim in his welcoming remarks informed that this similar workshop was jointly organized by MISIF and NI on 22 March 2006. The main reason of repeating this workshop was to provide a review and update as over the past 9-year period, there would probably be new players involved in the industry, who were keen to know more about the topics of the workshop. For those who had attended this workshop before, the programme would serve as an update on new developments in the industry or as a refresher session. Mr. Lim also said that MISIF viewed the stainless steel sector as a potentially growing one and the organization of this workshop as a step in the right direction. There were still avenues to increase the consumption of stainless steel in the country as well as explore other areas of applications. Hence, in order to capitalize on these potentials, Mr. Lim said that there was a great need for all relevant manufacturers and other stakeholders to continuously promote the benefits of stainless steel products. Mr. Lim further added that the industry these days was also facing many external challenges. As a whole, the industry were also experiencing trade measures including anti-dumping case by Vietnam on cold rolled stainless steel, anti-circumvention investigation by Turkey, price fluctuations of materials and products, and global competition. Without a doubt, all these developments had created tremendous challenge and discontent to the industry here. MISIF is now working closely with the Government and MITI to continuously

monitor the developments with a view to make conditions conducive for growth, including investment and export opportunities. Dialogue with CIDB MISIF held a dialogue session with senior officers of CIDB on 30 January 2015 in Sabah Room, Putra World Trade Centre, Kuala Lumpur. A total of eight representatives from member companies attended the session co-chaired by En. Megat Kamil Azmi Megat Rus Kamarani, Senior General Manager (Operation Sector) of CIDB and Dato’ Soh Thian Lai, President of MISIF. The meeting reviewed a wide-ranging issues concerning the iron and steel industry, particularly on CIDB Act 520 (Amended) 2011, Certificate of Approval (COA), MS EN 10025-2 (seamless square and rectangular hollow sections), Industrialised Building System (IBS) and use of local materials/products.

GST Forum with Epicor Epicor Software (M) Sdn Bhd, an affiliate member of MISIF, organized a half-day forum on GST on 9 March 2015 in MISIF Training Room, Shah Alam, Selangor. Twelve participants attended the forum. The invited speakers, Ms. Shelyn Hong, an Independent Tax Advisor from Sl Hong & Co. and Mr. Ben Lim from Epicor Software (M) Sdn Bhd gave an informative presentation about the challenges that manufacturers would face in the coming GST implementation. Briefing on Green Technology A briefing session on “Green Technology, GreenTech Malaysia and The Malaysian Iron and Steel Industry” was successfully held in MISIF Training Room on 5 February 2015. A total of 20 participants attended the session conducted by Pn. Norhasliza Mohd Mokhtar, Head of Green Econometrics Group from Malaysian Green Technology Corporation (GreenTech Malaysia). The topics of interest covered during the briefing were: • Suitability/benefits of green

technology to the manufacturing sector;

• Policies/regulations on green technology in Malaysia;

• Incentives for renewable energy, energy efficiency and green buildings in Malaysia.

Mr. Mark Lim presenting a token of appreciation on behalf of MISIF to Mr. Gary Coates at the end of the workshop

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ASEAN-China FTA Joint Committee Meeting The ASEAN Iron and Steel Council (AISC) delegation headed by Dato’ Soh Thian Lai, attended the ASEAN-China FTA Joint Committee meeting in Beijing, China from 4 – 6 February 2015. The delegation met with the ASEAN Caucus on 4 February 2015 and later attended the Joint Committee meeting on 5 February 2015. The meetings provided an opportunity for AISC to further explain the problem of unfair trade competition faced by the steel makers in ASEAN from the influx of cheap steel exports from China and for authorities to address the problem appropriately. The meeting had provided the ASEAN officials a better understanding and appreciation of the problems faced by the steel industry in ASEAN. The issue of the mismatch of HS codes was also highlighted and this would help the member country associations in further pursuing the matter with their respective governments. The meeting also provided a platform for the ASEAN officials to convey clearly their message and concerns to the Chinese officials. ASEAN would further pursue this matter in the coming dialogue with China Iron and Steel Association (CISA) scheduled in April, in Shanghai, China.

Electricity and Natural Gas Tariff In a statement to the press on 29 January 2015, MISIF informed that the Government previously increased the electricity tariff of between 17% - 19% effective January 2014 for industrial users, citing among others the escalation of international crude oil prices, which were hovering around us$100 to us$110 during that time. The price had since dropped by more than 50% to below us$50 per barrel. Substantial declines had also been witnessed on international natural gas (from more than us$4 per million British thermal unit (mmbtu) to below us$3 mmbtu) and thermal coal prices (from us$60/short ton to us$45/short ton) over the last six

months period. MISIF further added that the iron and steel industry was an energy intensive industry that consumed more than 800 kwh per metric tonne of electricity from steelmaking to rolling activities alone. Electricity and natural gas were essential utilities for making steel products. MISIF had previously highlighted that the increase in electricity tariff in January 2014 and subsequently on natural gas tariff in May 2014 would result in an additional cost of more than rm200 million and rm130 million per year respectively to the industry. The iron and steel industry would obviously need a competitive energy price to keep its production cost at manageable level. Hence, with the drastic decline in crude oil, natural gas and thermal coal prices, MISIF viewed that the government should similarly adjust and reduce the electricity and natural gas tariffs without further delay. MISIF expected the reduction should not be anything less than 20%. Any delay in lowering the electricity and natural gas tariffs would undermine, if not negate, efforts by the industry to remain competitive in this very challenging time. MISIF also informed that countries such as Singapore and Thailand had already lowered their electricity tariffs, to boost domestic industries and enhance the competitiveness of manufacturers. As such, MISIF hoped that the government should do likewise to avoid Malaysia losing her competitive edge in ASEAN and the global markets. Appointments The MISIF Council Meetings held on 28 January 2015 and 18 March 2015 endorsed the following representatives: • Mr. Ang Meng Chuan (Southern HRC

Sdn Bhd) as a MISIF Council Member; • Mr. Ng Kian Hin of Alpine Pipe

Manufacturing Sdn Bhd as the new Chairman of MISIF ERW Steel Pipes Group;

• Mr. Kong Ern Hun, Senior Manager of Southern Steel Berhad as the new MISIF representative to the SEAISI Technical Committee.

Customs Duties Order 2014 The Customs Duties Order (Goods under the Framework Agreement on Comprehensive Economic Co-Operation between ASEAN and China) (ASEAN Harmonized Tariff Nomenclature-AHTN) Order 2014 came into effect on 2 March 2015. The ASEAN-China Free Trade Agreement (ACFTA) Gazetted Customs Duties Order was based on the AHTN 10-digit. All Customs declaration for the importation and exportation of goods from and to China that were previously based on the Harmonised Code (HS) “Perintah Duti Kastam (PDK)” 2012 would now have to use the HS Code of the new ACFTA AHTN 2012 Customs Duties Order. This involved a change from HS Code 9-digit to HS Code 10-digit AHTN. Malaysia was now moving towards abolishing the Customs Duty Order (PDK) and would adopt the AHTN structure for all the FTAs. This structure change of PDK to AHTN would not lead to the erosion of tariff commitments as agreed under the FTAs. The change was to initiate Malaysia’s goal towards implementing a single tariff nomenclature by 2017. For further inquiries, please contact the following Custom’s officers: • Mr Mohd Wan Wizan Abdul Rahman -

603-8882 4812 • Ms Habsah Kamaron - 603 8882 2498 • Mr Saifulhilmi Abu Bakar - 603 8882

2344 Final AD Investigation on HRC On 19 June 2014, the Government of Malaysia initiated an anti-dumping investigation based on a petition filed by Megasteel Sdn. Bhd. on behalf of the domestic industry producing Hot Rolled Coils (HRC). The Petitioner alleged that HRC originating in or exported from the People's Republic of China, Republic of Indonesia and Republic of Korea into Malaysia at a price

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New Members Ordinary Member

Alumtan Union Metal Sdn Bhd 2520 Lorong Perusahaan 8C, Prai Industrial Estate, 13600 Prai, Penang Products Manufactured: Stainless steel ornamental pipes

Malaysia Steel Works (KL) Berhad Jalan Tandang, Section 51, 46050 Petaling Jaya, Selangor Manufactured: Steel billet and steel bar

Petra Fabricators Sdn Bhd Lot 58, Jalan Utas 15/7, Kaw Perusahaan Seksyen 15, 40000 Shah Alam, Selangor Products Manufactured: Pressure vessels, heat exchangers, package boilers and fuel gas skids

Southern HRC Sdn Bhd 2723 Lorong Perusahaan 12, Prai Industrial Estate, 13600 Prai, Penang Products Manufactured: Steel billet and hot rolled coils Affiliate Member

IME Technology Sdn Bhd No 22c, Jalan PJS 1/46, Taman Petaling Utama, 46000 Petaling Jaya, Selangor Type of Business: Trading In software and related accessories, Cadcam solutions

Kindly contact the MISIF Secretariat at 603-55133970 for enquiries on MISIF events and membership.

much lower than the price in the domestic market of the alleged countries. The Petitioner claimed that this was causing material injury to the domestic industry in Malaysia. The Government had conducted and completed a detailed investigation on producers and importers in Malaysia as well as producers/exporters from the alleged countries. A Federal Government Gazette dated 12 February 2015 had been issued. The anti-dumping duties imposed on imports of HRC from the People's Republic of China and the Republic of Indonesia were as follows:

The anti-dumping duties imposed on imports of Chequered Coils from the People's Republic of China and the Republic of Indonesia were as follows:

People's Republic of China:

All producers/exporters

15.62%

Republic Indonesia:

All producers/exporters

25.40%

The anti-dumping duties imposed on imports of P&O from the People's Republic of China and the Republic of Indonesia were as follows:

People's Republic of China:

All producers/exporters

15.62%

Republic Indonesia:

PT Krakatau Steel (Persero) TBK.

Others

20.56%

20.56%

The Government had made a final determination under subsection 25(1) of the Act that there was no dumping margin with regard to the subject merchandise originating or exported from the Republic of Korea into Malaysia because the volume of imports of subject merchandise was at negligible level. The Royal Malaysian Customs would enforce the collection of anti-dumping duties and this measure was effective for five years from 14 February 2015. With the imposition of anti-dumping duties on imports of HRC from the alleged countries, it was expected that

the issue of unfair trade practices would be addressed. Interested parties (importers, foreign producers/exporters and associations related to the investigation) could have access to the non-confidential version of the public report on the Final Determination by submitting a written request to the Trade Practices Division, Ministry of International Trade and Industry (MITI).

People's Republic of China:

Benxi Beiying Iron and Steel Group Imp.

and Exp. Corp. Ltd.

Benxi Iron and Steel (Group) Int'l

Economic and Trading Co., Ltd.

Rizhao Steel Wire Co., Ltd.

Shanxi Taigang Stainless Steel Co., Ltd.

Others

06.35%

03.49%

2.19%

02.49%

12.19%

Republic Indonesia:

PT Krakatau Steel (Persero) TBK.

Others

11.20%

11.20%

Forthcoming MISIF Events 2015 MISIF/SEAISI Seminar on Energy Efficiency Date: 8 April 2015 Venue: Concorde Hotel, Shah Alam

Training Course on Introduction to Steelmaking Date: 27-28 April 2015 Venue: MISIF Training Room, Shah Alam

Training Course on Heat Treatment Date: 29-20 April 2015 Venue: MISIF Training Room, Shah Alam

MISIF 2015 Golf Invitational Challenge Date: 20 August 2015 Venue: Kelab Gold Perkhidmatan Awam (KGPA), Bukit Kiara, Off Jalan Damansara, Kuala Lumpur

Trade Forum Date: 22 October 2015 Venue: Sunway Resort Hotel & Spa, Bandar Sunway, Petaling Jaya

MISIF 34th Anniversary Dinner Date: 22 October 2015 Venue: Sunway Resort Hotel & Spa, Bandar Sunway, Petaling Jaya