No. 1/December 2014

The

REMARKS BY YB DATO’ SRI MUSTAPA MOHAMED
Minister of International Trade & Industry
I
would
like
to
commendthe efforts
oftheMalaysia
S t e e lInstituteonthepublicationof“The
Steel Advocate”, the firstnewsletter of Malaysia SteelInstitute (MSI).

CEO FOREWORD

in the iron and steel industry.

The iron & steel industry is an
important sector for the growthand development of Malaysia
in achieving our vision of adeveloped nation in 2020.
Furthermore, this industry plays
a significant role in supporting
other important sectors likemanufacturing, construction, oil& gas, E&E and tourism. Therefore,
it is essential that the iron & steel
industry remains competitive &resilient in facing the“...mandated to
global challenges.

MSI, as the ninth (9th)agency under Ministry undertake research,of International Trade promote and develop We acknowledge
and industry (MITI), the competitiveness, that the iron &ismandated
tosteel industry has
resilience andundertake research,animportantsustainability...”promote and developrole to play in thethe competitiveness, resilience development of our nation.
and sustainability of the local This industry has attracted moreiron & steel industry. With than RM8.8 billion in domestic
the publication of “The Steel & foreign investments from
Advocate”, MSI will be able to January to July 2014 compareddisseminate useful information to RM7.0 billion in year 2013
as well as to update the for basic metal & fabricateddevelopment and opportunities metal products.

I have great pleasure to be partof the editorial team to produce
Malaysia Steel Institute’s inauguralissue of our quarterly newsletter– “The Steel Advocate”. It is ouraspiration to publish timely andaccurate news on & developmentin the steel industry locally andinternationally for the benefits of
the Malaysian Steel players.
The global competition in thesteel industry is getting intense
owing to the slow-down in the
global economy coupled with theover-supply situation world-wide.
The Malaysian steel industry iscurrently adversely affected by
the continuous influx of imported
steel products, due to the global
unabated over-production bymajor steel producing countries.

Table of Contents

Remarks by YB Dato’ Sri Mustapa Mohamed
CEO Foreword
MSI Background
Steel Advocate
MSI Membership
Right and Obligations - Anti - Dumping Agreement - Malaysian Practice
Events & Activities :1) Bahru Stainless Sdn Bhd Factory Visit (4 September 2014)
2) CIDB “Bengkel Mengemaskinikan Standard Bagi Bahan Besi, Keluli dan Aluminium serta Perlaksanaan
Kawalan Kualiti Dalam Pembinaan dan Bahan Binaan” (23-25 September 2014)
3) MISIF 11th Conference of Status & Outlook on Malaysia Iron & Steel Industry (16 October 2014)
Upcoming Events : 1) Metal Middle East (10-13 January 2015)
2) FMM Seminar on GST Treatment Exports & Imports for Exporters/Importers/LMW/FIZ/FCZ/ATS/ATM/WS(15 January 2015)3) 2015 6th International Conference on Mechanical, Industrial & Manufacturing Technology - MIMT 2015
(6-7 March 2015)4) Stainless (5-6 June 2015)5) Metallurgy - Litmash (8-11 June 2015)
6) GIFA/METEC/THERMPROCESS/NEWCAST (16-20 June 2015)
Photo source : Tota Steel

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STEEL ADVOCATE
Continuation of Remarks by for domestic consumption & steel industry.
Minister of International Trade export markets.
& Industry…
We hope that these new steel
players will help to move theiron & steel industry up thevalue chain by producing
higher grade steel productsContinuation of CEO foreword…
In anticipating the challenges facing
the industry, MSI is planning to help
reshape & facilitate the Malaysian
Iron & Steel Industry (MISI) to movethe players up the value chain to
support and focus on the 6 selectedcatalytic sectors• electrical & electronics (E&E)/ICT
manufacturing;• machinery and engineering (M&E);• chemical and petrochemical;• automotive;• oil & gas; and• shipbuilding.

I once again congratulate
MSI for the publication of theinaugural issue of “The Steel
Advocate” which provides
useful & updated information
for the benefit of the iron &In this regards, MSI aspires todevelop a set of strategic thrusts for
MISI in the areas of:• developing new talents;• enhancing productivity & efficiency;• technology, innovation and R&D;
• SME development;• export promotion;• trade remedies & FTAs awareness;• interaction & integration of steel
players; and• governance reform – standards,
accreditation, certification andenforcement.

YB Dato’ Sri Mustapa Mohamed
Minister of International Trade &Industry
In the next 10 years, it is envisaged
that local steel players through JVwith foreign established steelmakers,
R&D and collaboration withinstitution of higher learning both
locally and abroad would enable theindustry to produce high-grade steel
products to compete globally.
Happy reading…..

Lee Khim Meng
CEO of MSI

MSI BACKGROUND
MALAYSIA STEEL INSTITUTE(MSI), is an agency under
the Ministry of International
Trade And Industry (MITI) &aims to:• promote&developcompetitiveness,
resilience & sustainabilityof the iron & steel industry;• provide
advisory
services, coordinate andpromote the study of
new technology & talentdevelopment for iron &steel industry; and• facilitate the adoption ofinternationally accepted
standards for & help
promote the utilizationof locally manufactured
steel products.
MSI’s vision is to reshapeand facilitate the necessary
environment for a sustainableiron & steel industry, which
include among others to:• advise & support Government
policy formulation;• conduct
research&development (R&D) for theiron & steel industry;• facilitate the development &implementation of standards
in consultation with thegovernment agencies andthe iron & steel industry;• plan & facilitate humancapital development in theiron & steel industry;• establish a comprehensive
iron
&
steel
industrial
database;• providevalue-added
services for iron & steel
industry;• assist in resolving iron & steel
industry related issues; and• provide advisory services on
trade remedial measures.

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STEEL ADVOCATEMSI has proposed 8 strategic
thrusts for the iron & steel
industry that include:
1. developing new talents,
via skills development &strategic curriculum at
tertiary level education;
2. enhancing
productivity
andefficiency,
via
productivity benchmark &domain experts;

3. promoting
technology,
innovation & R&D, via
collaboration with foreign
steel players and with local
universities and colleges;
4. supporting SME development,via
enhancing
SME
competitiveness;
5. exports promotion, via
exploring export potential& product development;

6. trade remedies and FTAs,
via awareness building;
7. facilitating
enabling
environment
fortheindustry, via enhancing
interaction & integration;and8. governance reform, via
enhancement of standards,
accreditation, certification& enforcement

ST EEL ADVOCAT E
The Steel Advocate is a
newsletter under the purview
of Malaysia Steel Institute(MSI). MSI aspires to be thevoice behind the iron and steel

industry where it will supportand recommend measures
for the development of theindustry.

This newsletter is envisaged toprovide information, status,
updates, challenges, eventsand upcoming events related
to the iron & steel industry.

MSI M EMBERSH IP
In order to get greatercommitment,
MSI
hasembarked on a membershipdrive to attract:• Business entities involvedin activities related in the
manufacture/productionof iron & steel raw materials,
semi-finished goods or finishedgoods, processing, or tradingof iron & steel products.
• Business entities engaged in
the provision of services tothe iron & steel sector suchas consultancy, engineering
design & manufacturing
related services.
• Organizations or representative
groups or sub-groups of theiron and steel sector, including
academic / technical /research organizations related
to matters on iron and steel
industry.
• Bone-Fide individuals
interested in the work of
MSI.
The benefits of MSI membership,
when fully in operation, include
but not limited to:• Accessonlatestdevelopments in the iron &- Via the MSI quarterly
Newsletter - The MSI
Newsletter will provide

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regular announcementsof activities & forthcoming
events related to the iron& steel industry, including
government
policies,
incentives, legislations &procedures.
- Industrial Trade directory
(“The
MSI
Trade
Directory”) - annually;steel industry in Malaysia:
Industrial Relations Advisory
Services:- Play a facilitative rolein assisting & promoting
cooperation
amongstall the players along thevalue chain in the iron &steel industry.
- Act as a conduit between
the iron & steel industry
players & the government
in contributing towards
policy development &resolving industry related
issues.
Industrial Human Resource
Development:- Coordinate & facilitate
Industrial Skills Training
programs & help develop

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•

•

the talent pool for theIron & Steel Industry tosupport efforts in moving
the industry up the value
chain.
Advisory
Servicesonmatters pertaining to trade
remedies.
Exclusive Social / Educational
Events:- Exclusive invitations toparticipate in seminars,
conferences, workshops,
members’
networking
sessions,business
matching sessions, eventse.g. study tours.
Enjoy special discounts on:- Registration for Seminars/
Conferences;- Advertisements in MSI
quarterly Newsletter;- Advocacy & Advisory
Services; and- Various
information/ library materials &information services.
Participation of membersin the Consultative Panelto contribute & put forth
their ideas in progressing
members’ interests withthe view in enhancing theefficiency & sustainabilityof the iron & steel industry
in Malaysia.

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STEEL ADVOCATERIGHTS AND OBLIGATIONS-ANTI-DUMPING AGREEMENTMALAYSIAN PRACTICE

INTRODUCTION
In the World Trade Organisation(WTO), there are about 60
agreements and decisions totaling
550 pages1 and of interest here is the
WTO and Anti-dumping Agreement(ADA) which came into force withthe birth of the WTO in 1995. Despite
being in place for more than 19
years, ADA is still not well understoodat least in Malaysia; except for those
who have been involved in an antidumping (AD) investigation vis-àvis (i) those involved in initiating ananti-dumping (AD) action; (ii) others
subsequently requested to submit
questionnaire responses to an AD
case initiation; and (iii) those at thereceiving end of AD actions by othercountries on their exports.
TYPES OF TRADE REMEDIES
Under the WTO there are three typesof trade remedy agreements namely
Agreement on Implementation of
Article VI of the General Agreement
on Tariffs and Trade 1994 (ADA),
Agreement on Subsidies andCountervailing Measures (ASCM)
and Agreement on Safeguards(ASG). Each trade remedy
agreement has a specific basis for
initiating an action that may result in
an increase in tariffs, in addition to thetariffs the country has bound itself at
the WTO; the ASG has also an option
in the form of quantity restriction if anincrease of tariff option is not takenup.

aims to address the material injury
suffered through the unfair practiceof dumping, where a producer sells
goods at a lower price in a foreign
market than in its own domestic
market; and where a producer isable to charge at a lower price in aforeign market through government
subsidies that are considered asprohibited or actionable under SCM.
The ASG on the other hand, as atemporary measure, aims to curb
sudden increase in imports that thedomestic industry is unable to copewith and is suffering serious injury, toallow the affected industry producers
time out to allow for adjustment tomeet competition.
All the three types of trade remedy
measures give the right to theaffected domestic industry torequest the government to initiate
an investigation. At the same timethe industry making the request has
obligations that the industry needs
to fulfil for the government to act on
where the industry needs to submit
a duly filled & fully documented
petition, supported by evidence, byor on behalf of the domestic industry
to the government to support therequest for action.
BASIS FOR ANTI-DUMPING ACTION
Thelegalbasisortherighttorequestfor
an anti-dumping action in Malaysia
is governed by the Countervailingand Anti-Dumping Duties Act 1993
(the Act) and the countervailingand Anti-Dumping Regulations
1994 (Regulations). A petition has
to be submitted to the Malaysian
Investigating Authority (IA) which ishoused in the Ministry of International
Trade and Industry. The petition canbe submitted by or on behalf of thedomestic industry producing the
product.

OBLIGATIONS OF THE PETITIONER
Regulation 2 of the Regulations
outlines the obligations of thepetitioner in terms of the contentsof the petition based on ‘prima
facie’ evidence. Briefly these include
among others:• Identifying of all local producers
producing the like product;ensure that those supporting
the petition account for 50%
of total production as against
those who oppose the petition;and those supporting thepetition account for at least 25%of total production, including
those have no view to support
or oppose the request;• Identify
importers,
foreignproducersoftargeted
countries;• Scope or coverage of products
to be investigated;• Targeted countries with ‘prima
facie’ evidence that the
products are being dumped
from these countries; and• Evidence of material or threat ofmaterial injury to the domestic
industry and is caused by theimports.
OBLIGATIONS &INTERESTED PARTIESRIGHTSOFThe Act defines “interested party” as:• A producer, exporter or importerof the product;• A trade or business associationof which a majority of its
membersareproducers,
exporters or importers of the
product;• The government of a country
whose producers of the productare named in the petition;• Producers of the product in
Malaysia;

Both the ADA and SCM, respectively
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WHO w e b s it e : h t t p: // www. wt o. or g/ english/ d oc s_e/l egal _e/l egal _e.h tm

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STEEL ADVOCATE• A trade or business associationof which a majority of its
members produce the productin Malaysia; and• Any other parties as theGovernment
considersappropriate.
Once the AD investigating is initiated,the IA will send out notification to allinterested parties informing of theinitiation and invite them to submit
information in relation to the AD
investigation. Failure to respond will
result in them losing their right to beheard in the course of investigationand the right to defense. It has tobe highlighted that the governmentof the country that has received
the notification of initiation, too has
an obligation to inform and extend
the exporter/foreign producer’squestionnaire to all of its producers of
the product.
OBLIGATIONS & RIGHTS OF THE
INVESTIGATING AUTHORITY
In an AD investigation, the IA has anumber of obligations to fulfil:
1. Timely notifications to interested
parties based on the Act:• on receipt of a fully
documented petition;• decision to initiate theinvestigation or rejectionof the petition (within one
month of receipt of petition);• preliminary determinationand gazette (within 120 days

• Preliminary
Determination
report and gazette;• Notice of essential facts
before final Determination:
and• Final Determination reportat completion of theinvestigation and gazette.
from the date of initiation,with provision for extension of
one (1) month;• notice of essential facts ofthe findings and to provide
reasonable time for theinterested parties to respond;• final determination whether
positiveornegative
determination and gazettethe findings (within 120 days);and• Extension of the timelines
can be done provided
the IA agrees if there is arequest by any party; or the
IA needs the additional time
to complete its Preliminary
Determination.
2. Conducting investigations:• verification of information
submitted by petitioner
and other producers of the
product;• verification of cooperating
importers; and• verification of cooperating
foreign producers/exporters.
3. Objective evaluation of all thesubmissions by all parties.
4. Coming up with reports/findings
within mandatory timelines (asmentioned earlier):

5. Ensure confidentiality of the 		
information provided by parties:• makecertainpartiessubmitting
confidential
information to also furnish
non-confidential summaries
topermitreasonable
understandingofthe• confidential submissions; andreject the submission if
non-confidential
versionis not provided, unless astatement of reasons on whysummarization is not possible
is provided.
6. Investigate
whethertheimposition of AD duty is in
public interest.
7. Defend in the local courts of
its findings if the investigation isreferred to judicial review.
8. Defend the case if it isbrought to the WTO under
the WTO Dispute Settlement
Mechanism.
RELEVANCE TO THE IRON &STEEL INDUSTRYThis will be examined in thefollowing episode of this newsletter.

EVENTS & ACTIVITIES: BAHRU STAINLESS SDN BHD FACTORY VISITBAHRU STAINLESS SDN BHD (BSS) isa part of Iskandar projects in Johor,

which is the sole manufacturer ofstainless steel with strong & growing

market domestically & in ASEAN.
BSS provides employment
to 417 employees (95% are
Malaysians), mostly trained in thefactories of ACERINOX Europe(Spain) & Columbus Steel(South Africa). BSS is a subsidiarycompany of ACERINOX, Spain(67%), Nisshin Steel, Japan(30%) & Metal One (3%). BSS
expected turnover this year is

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STEEL ADVOCATEUSD350 million (about RM1.122
billion), out of which 40% (USD140
million/RM449 million) is catered
to the Malaysian market. This isfeasible as BSS has been utilising its
parent companies’ resources suchas technology, material, finance& other intangible assets whichallow BSS to produce special steel
grades and thicknesses, which arevalue-added products sold at very
competitive prices and compete
effectively in the regional markets.

INVESTMENT
The first phase of the BSS plant, withapproved investment of RM1.297
billion, is producing 240,000 MT/
year (out of which 182,000 MT/year

will be cold rolled coils). This plantis in operation since December
2011. It consists of a cold rolling millwith a 1,500mm width Sendzimir,
a combined annealing & picking
line, a skinpass and a finishing mill.
Subsequently, the second phase,with approved investment of
RM999 million, is in operation during
the second quarter of 2013, and it
has the total production capacityof 400,000 MT per year. BSS has
also planned for the third phaseand fourth phase of the plant.
Initially, BSS planned to embark onphase III in 2017/2018 and phase IV
2-3 years after that. However, thiswould depend on ASEAN & world
market conditions.
STRATEGIC LOCATION
BSS’ strategic location at theseaside provides some advantage
for ACERINOX to develop its
commercial presence in theregion. This plant is constructed withhigh efficiency criteria, similar to
those of North American Stainlessin Ghent, Kentucky, USA, owned
by ACERINOX.
With its plant fully in operation, BSS will
be able to offer a comprehensive
variety of stainless steel material,
manufactured with the highest

Note : MITI and MSI visited Bahru
Stainless Sdn Bhd on 4 September
2014

quality levels for domestic &ASEAN markets. This investment
by ACERINOX and Nisshin Steelis an important strategic stepin improving ACERINOX’s asset
distribution, & significant presencein the region.

EVENTS & ACTIVITIES:CIDB “BENGKEL MENGEMASKINIKAN STANDARD BAGI BAHAN BESI, KELULI& ALUMINIUM SERTA PERLAKSANAAN KAWALAN KUALITI DALAM PEMBINAAN& BAHAN BINAAN”
The
CIDB“Bengkel
Mengemaskinikan Standard Bagi
Bahan Besi, Keluli & Aluminium serta
PerlaksanaanKawalanKualitiDalam
Pembinaan & Bahan Binaan” washeld on the 23 – 25 September 2014
at the Hotel Seri Negara in Kuala
Lumpur.
The first day of the workshop
focused on the suitability of
Steel grade S235JR to be used
as construction material. CIDB isconcerned that the majority of thesteel imports consists S235JR grade
which does not have the tensile
strength to support heavy load
application like beams & columns.
This grade is more suitable to be
used in light load applications likeconstruction fencing walls, stairway
handles & door bars. It was decided

during the session that CIDB should
not exclude S235JR grade entirely
from building material usage but tocome up with a standard to limit its
application to only light weight andnon – supporting structure usage.
The industry had earlier argued
that it would not be economical
to use hi tensile strength steel in lightloads.
The participants were divided into
4 panels by product group:

1. Hot-rolled, Pipe & Plate; 2.
Aluminium; 3. Long Products; and4. Coated Steel – Sheets.
The groups were tasked to;• Verify and ensure the correctnessof standards (EN, BS, ISO, MS)assigned to the appropriate
steel products on the CIDB
Quality Control list; and• Ensure all the HS codes for therespective products.

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STEEL ADVOCATEEVENTS & ACTIVITIES:MISIF 11TH CONFERENCE OF STATUS & OUTLOOK ON MALAYSIA IRON &STEEL INDUSTRY
The 11th MISIF Conferenceon Status and Outlook of the
Malaysian Iron & Steel industry
was held on 16 October 2014at
Sunway Resort Hotel & Spa,
Petaling Jaya, Selangor. With
the chosen theme “Meeting
the Global Challenge of Steel”,
the conference provided status& outlook of the iron and steel
industry.
In the morning, Mr. Frank
Mizuno, a consultant fromPricewaterhouseCoopers (PwC),
presented “Magic Numbers in
Malaysian Steel industry” where
he provided status, concerns &challenges for the iron & steel
industry in Malaysia. While, Mr Tan
Ah Yong, the Secretary Generalof South East Asia Iron & SteelInstitute (SEAISI), presented on“Major Conclusions of the 2014
SEAISI Conference & Exhibition”.
He touched on the strategic
challenges&
opportunities
based on Metal Bulletin Research(MBR), CRU & Wood Mackenzie.
This included key cost drivers,
steel price trends & problems of
low-priced exports from China.
The afternoon session of theConference started with apresentation by Mr Tony Lee
Khim Meng, CEO of Malaysia
Steel Institute (MSI). He presented“Charting the Malaysian Iron &Steel Industry to Greater Heights”
which showed the current statusof steel industry (domestic &international); projection of
Malaysia Steel consumption.

Vehicles & Hydrogen & Fuel Cell
Vehicles.

ASEAN Economic Community
2015.
Mr Tiger Huang, Managing
Consultant from Hatch became
the focus in this conference
because of the hot topic,“The China Factor – Still a
Threat to Global Markets?” In
his presentation, he updated
the Conference on Chinese
economy since 2012, thedynamics of Chinese steel industry
since 2012 China -Malaysia steel
industry relationship.The second
part of the afternoon session was
graced with three presentations
on automotive, construction &oil & gas industry. The CEO of
Malaysia Automotive Institute(MAI), Mr Mohamad Madani b.
Sahari elaborated on National
Automotive Policy (NAP) 2014 &some details on Energy Efficient
Vehicles (EEV) which includes
Hybrid Vehicles, Battery Electric

On the other hand, “Status &Outlook of Construction industry”
was presented by Ir. Ahmad ‘Asrib. Abd Hamid, Senior General
Manager from Construction
Industry
Development
Board Malaysia (CIDB). This
presentation shared constructionindustry overview, projection of
construction demand 2014-2015,
construction demand basedon Budget 2014 & Construction
Industry Master Plan II 2016-2020.
He also updated the Conferencewith mega projects in Malaysia;
such as Mass rapid Transit (MRT),
KL-Singapore High Speed Rail
System, Tun Razak Exchange,etc.
Last but not least, Mr Mohd Faizal
Othman, a Senior Manager, of
PETRONAS presented “Status
and Update of the Oil & Gas
Industry in Malaysia” where heelaborated on Malaysia’s Oil &Gas production, enhanced oil &gas recovery, solution to monetisestranded gas & also expanding
downstream capacity of oil &gas activities in Malaysia. The
next MISIF Conference will beheld in 2016.

To provide the global updates,
Mr Guna Seelan Balakrishnan,
Principal Assistant Director, of MITI
presented “Capitalising on theFTAs, AEC & RCEP” which focusedon updates of bilateral & regional
Free Trade Agreements (FTAs) &7

STEEL ADVOCATEUPCOMING EVENTSMETAL MIDDLE EAST
Date: 10-13 January 2015
Venue: Dubai,UAE
T:+49 211 45 6077 93 (Mr Daniel Ryfisch)
E: RyfischD@mesee-duesseldorf.de

2015 6TH INTERNATIONAL CONFERENCE
ON MECHANICAL, INDUSTRIAL, AND
MANUFACTURING TECHNOLOGIES MIMT 2015
Date: 6-7 March 2015
Venue: Equatorial Hotel, Melaka.
T:1-661-888-4278 (Ms Heleny Yi)
E: mimt@iacsit.org

Metallurgy-Litmash
Date: 8-11 June 2015
Venue: Moscow, Russia
T:+49 211 45 60 77 93 (Mr Daniel Ryfisch)
E: RyfischD@mesee-duesseldorf.de

FMM SEMINAR ON GST TREATMENTEXPORTS & IMPORTS FOR EXPORTERS/IMPORTERS/LMW/FIZ/FCZ/ATS/ATM/WS
Date: 16 January 2015
Venue: Dewan FMM, Kuala Lumpur.
T:03-62867200 (Ms Sandy / Ms Jess Chong)
E: sandy@fmm.org.my

STAINLESS
Date: 5-6 June 2015
Venue: Czech Republic
T:+420 541 152 960 (Mr Jiri Rousek)
E: irousek@bvv.cz

GIFA/METEC/THERMPROCESS/NETWORK
Date: 16-20 June 2015
Venue: Dusseldorf, Germany
T:+49 211 45 60 447 (Mr Markus Liedtke)
E: LiedtkeM@messe-duesseldorf.de

We welcome comments and feedback:T: 03-6270 1399
F: 03-6270 1059
E: admin@malaysiasteelinstitute.com

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