It is reported that Maegma Steel HRC Sdn Bhd's proposed MYR 4.5 billion hot roll coil steel project in Tanjung Hantu near Lumut, aims to cater to the growing domestic demand and to help reduce Malaysia's dependence on steel imports.
The facility will source its iron ore requirements from Vale SA's iron ore distribution centre in Lumut while Petroliam Nasional Bhd will supply the natural gas.
Mr Uwe Ahrens CEO of Maegma said that "Steel and hot roll coil in particular, is an essential part of any country's economy and Maegma's first phase capacity of three million tonnes per year will reduce Malaysia's dependence on imports to the value of more than MYR 6 billion per year alone."
Mr Ahrens said the Maegma fully integrated facility project will require about 60 million metric British thermal units of natural gas per day. Maegma has obtained all relevant licenses, permits and approvals, detailed engineering terms, drawings from equipment suppliers and contractors and is ready to commence Phase 1 (a & b) of the project to produce three million tonnes of HRC annually by 2017.
Maegma intends to increase capacity to produce up to 10 million tonnes of HRC by the end of Phase 3 of its proposed development in 2027 with the financing then provided by the project's cash flow and gearing capacity projected to be strong enough to fund the expansion.
Malaysia consumed 1.7 million tonnes of HRC and 1.3 million tonnes cold rolled coil in 2009 and of this amount imports amounted to 0.8 million tonnes of HRC and 0.8 million tonnes of CRC, bringing the total import of flat steel sheets for the year to 1.6 million tonnes.
Maegma expects to commence operations of phase 1a in 2015 at a production capacity of 1.5 million tonnes a year by which time Malaysia is expected to be importing 1.7 million tonnes of HRC and 1.3 million tonnes of CRC.
According to Maegma's current plan, total production capacity is scheduled to rise to three million tonnes by 2017 and then 6.5 million tonnes by 2022 under Phase 2 of the development plan. Total production capacity is expected to hit 10 million tonnes a year circa 2027.
Source - The Malaysian Reserve
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