Source: SEAISI
Mr Azlan Abdullah, the CEO of Mycron Steel Berhad of Malaysia recently presented a comprehensive paper on Malaysian CRC industry in the Asian Steel Conference in Singapore. The paper covered the latest status and also the challenging future of the Malaysian cold rolling mill industry. This article is a summary of his presentation.
The CR mill industry is expanding rapidly with new capacities being installed. Last year Megasteel commenced operation of its new tandem cold mill facility in Banting with a big 1.5 million tpa capacity. This year the other two existing players, Mycron and Ornasteel will also be expanding the capacity and a new mill, Yung Kong plans to have a reversing mill with 150,000 tpa capacity. By the end of this year, Malaysia will have a strong 2.53 million tpa capacity of cold rolling mill industry as shown in he following table.
|
Company |
Design capacity
(tpa) |
Additional Capacity 2007 (tpa) |
|
Mycron Steel |
180,000 |
80,000 |
|
Ornasteel |
440,000 |
180,000 |
|
Megasteel |
1,500,000 |
- |
|
Yung Kong |
- |
150,000 |
|
TOTAL |
2,120,000 |
410,000 |
Malaysia consumes around 1.2 million tons annually. Prior to 2006, 59% of CRC demand was imported. Last year, imports were estimated to have dropped to 34% due to the entry of a new producer, Megasteel. As Megasteel becomes more efficient and gradually increases its output, coupled with added capacities due to expansion by Mycron and Ornasteel, Malaysia is expected to be self-reliant by 2008, except for certain higher grades of CRC.
Major CR market segments (of 1.17 million tons per year) are galvanizing plants and pipe manufacturers each with annual consumption of around 300,000 tons. Futhermore, about 250,000 tons go through service centers before being used for further manufacturing by end users (auto, electronics, etc.). Tinplate manufacturers consumes another 250,000 tons of CR blackplate while the auto industry is still a niche segment of 55,000 tons. Drum makers 50,000 tons and around 15,000 tons is used by miscellaneous industries.
The future demand looks promising with several new potential users of CRC in the country. An electro-galvanising (EG) plant is in the commissioning stage in Klang with capacity of 150,000 tpa and another one is being proposed in Penang with similar capacity. Additionally, the two national car producers -Proton and Perodua- have potentials of sourcing some of their CR sheet needs from local suppliers in the future. In order to improve productivity and quality to serve customers better, CR mills have been relying on technology assistance from major overseas steelmakers. Mycron has been working with JFE while Ornasteel is getting assistance from its parent company China Steel Corporation. Some achievements of Mycron include the ability to produce higher quality CRC and thinner gauge (down to 0.2 mm). A better quality domestic HRC would definitely help CR mill in improving their products further.
Finally Mr Azlan concluded that the outlook for steel industry in Malaysia appears to be bright after the launch of the 9th Malaysia plan, in which the Government will spend MYR 200 billion on infrastructure projects over the next 5 years. Malaysian steel demand is forecasted to rise by 10% in 2007 according to OSK Investment Research.
