Top executives of major Malaysian steel companies, Ann Joo Resources, Malaysia Steel Works, Lion Industries Corp, and Southern Steel, have urged the Ministry of Investment, Trade, and Industry to investigate Alliance Steel's compliance with its 2014 manufacturing license. Allegations include license violations and dumping steel in the local market. The executives also question changes in Alliance Steel's shareholding. The turmoil centers on Alliance Steel's production, export quotas, and adherence to tax incentives, reports The Edge.
In a significant development, top-level executives from prominent Malaysian long steel companies, including Ann Joo Resources, Malaysia Steel Works, Lion Industries Corp, and Southern Steel, have collectively approached the Ministry of Investment, Trade, and Industry (Miti). Their plea is to scrutinize the compliance of Alliance Steel (M) Sdn Bhd with the terms of its manufacturing license granted in 2014.
At the core of the executives' concerns are allegations of Alliance Steel violating its manufacturing license terms, specifically related to dumping certain steel specifications in the local market. Additionally, there are claims regarding changes in Alliance Steel's shareholding, a matter that necessitates approval from both Miti and the Malaysian Investment Development Authority (Mida). However, doubts persist regarding whether such changes in shareholding have indeed occurred.
Alliance Steel, the focal point of these allegations, has yet to respond to queries from The Edge, leaving the industry and stakeholders eagerly awaiting clarity on these contentious issues.
To provide context, Alliance Steel's manufacturing scope encompasses square billets, high-strength rebar, high-speed wire rods, and large-scale H-shaped steel bars (H-beams). A crucial stipulation in its manufacturing license mandates the export of at least 50% of its production, particularly in the iron and steel supply chain not currently produced in Malaysia, such as H-beams.
This 50% export requirement, too, is under scrutiny, raising questions about the industry's adherence to the conditions outlined in their manufacturing licenses. The letter submitted to Miti emphasizes the need for strict production limitations in the domestic market, aligning with the manufacturing license conditions. Simultaneously, the executives request an investigation into whether these steel producers comply with the conditions associated with tax incentives granted by Mida.
While the executives avoid explicitly naming Alliance Steel in their letter, the target of their concerns is unmistakable. Alliance Steel's response to these allegations holds the key to resolving the ongoing industry turmoil and ensuring adherence to regulatory frameworks.
The steel industry in Malaysia faces a potential upheaval as top executives from major players, including Ann Joo Resources, Malaysia Steel Works, Lion Industries Corp, and Southern Steel, urge Miti to investigate Alliance Steel. Allegations range from violations of manufacturing license terms to dumping steel in the local market. Changes in Alliance Steel's shareholding are also under scrutiny. The executives stress the importance of adhering to export quotas and conditions tied to tax incentives. With Alliance Steel yet to respond, the industry awaits clarity on these contentious issues for a path forward.