KUALA LUMPUR: Megasteel Sdn Bhd has defended its proposal to the Ministry of International Trade and Industry to impose import tariffs on steel products, saying that “the proposal to reduce the import duty and replace duty exemption with duty drawback covers the entire flat steel sector and will help all flat steel producers to compete more effectively”.
The Edge Financial Daily reported last week that Megasteel had proposed a reduction in import duty from the existing 25% to 15% or RM300 per tonne, whichever is higher, on all flat steel products combined with the abolishment of duty exemption.
In an emailed statement, Megasteel clarified that flat steel in the proposal referred to hot-rolled coils or HRC (HS codes 7208 & 7211), cold-rolled coils or CRC (HS codes 7209 & 7211), coated coils like galvanised iron, electro-galvanised and coloured sheets (HS codes 7210 & 7211) and lastly pipes and tubes (HS codes 7304, 7305, 7306 & 7307).
“There should be the consideration that duty exemption will not be granted with the reduction in duty in order to plug the loopholes in the current system whereby there is rampant importation of HRC, CRC, coated coils and pipes on a duty-free basis from many non-Asean countries into Malaysia,” the company said last Friday.
In justifying the increased protectionism, Megasteel said following the termination of the safeguard petition for HRC by Megasteel, the government agreed to explore other options to assist the local flat steel products industry. To-date, it said five licences to produce HRC have been issued, but only Megasteel has implemented its project.
Megasteel has proposed that a duty-drawback system be reinstated, instead of duty exemption, to assist manufacturers that import and process for re-export.
“The duty-drawback system is time tested and being used by other industries and can be in the form of cash or bank guarantee. For the industries that will not be granted duty exemption, the impact will be minimised with additional measures to assist them,” Megasteel argued, but did not provide specifics on the additional measures.
“Of the one million tonnes of HRC imported into Malaysia last year, about 400,000 tonnes were from Taiwan, 200,000 tonnes from Japan and about 100,000 tonnes from South Korea. Of these imports, about 70% are within the range that we can produce,” said Megasteel, citing a report by the Malaysian Iron and Steel Industry Federation at a recent steel conference.
“The effect of the withdrawal of duty exemption on industries will be minimal if every effort is made to use local materials,” Megasteel said.
Megasteel is 78.9%-owned by Lion Corp Bhd with the balance held by Lion Diversified Holdings Bhd. Lion industries Corp Bhd has substantial holdings in both Lion Diversified and Lion Corp.
This article appeared in The Edge Financial Daily, November 8, 2011.
The Edge Financial Daily reported last week that Megasteel had proposed a reduction in import duty from the existing 25% to 15% or RM300 per tonne, whichever is higher, on all flat steel products combined with the abolishment of duty exemption.
In an emailed statement, Megasteel clarified that flat steel in the proposal referred to hot-rolled coils or HRC (HS codes 7208 & 7211), cold-rolled coils or CRC (HS codes 7209 & 7211), coated coils like galvanised iron, electro-galvanised and coloured sheets (HS codes 7210 & 7211) and lastly pipes and tubes (HS codes 7304, 7305, 7306 & 7307).
“There should be the consideration that duty exemption will not be granted with the reduction in duty in order to plug the loopholes in the current system whereby there is rampant importation of HRC, CRC, coated coils and pipes on a duty-free basis from many non-Asean countries into Malaysia,” the company said last Friday.
In justifying the increased protectionism, Megasteel said following the termination of the safeguard petition for HRC by Megasteel, the government agreed to explore other options to assist the local flat steel products industry. To-date, it said five licences to produce HRC have been issued, but only Megasteel has implemented its project.
Megasteel has proposed that a duty-drawback system be reinstated, instead of duty exemption, to assist manufacturers that import and process for re-export.
“The duty-drawback system is time tested and being used by other industries and can be in the form of cash or bank guarantee. For the industries that will not be granted duty exemption, the impact will be minimised with additional measures to assist them,” Megasteel argued, but did not provide specifics on the additional measures.
“Of the one million tonnes of HRC imported into Malaysia last year, about 400,000 tonnes were from Taiwan, 200,000 tonnes from Japan and about 100,000 tonnes from South Korea. Of these imports, about 70% are within the range that we can produce,” said Megasteel, citing a report by the Malaysian Iron and Steel Industry Federation at a recent steel conference.
“The effect of the withdrawal of duty exemption on industries will be minimal if every effort is made to use local materials,” Megasteel said.
Megasteel is 78.9%-owned by Lion Corp Bhd with the balance held by Lion Diversified Holdings Bhd. Lion industries Corp Bhd has substantial holdings in both Lion Diversified and Lion Corp.
This article appeared in The Edge Financial Daily, November 8, 2011.
