Automotive, Data Centres, Aerospace Offer Higher-value Opportunities For Steelmakers -- Sim

SUBANG JAYA, Oct 29 (Bernama) -- Malaysia’s iron and steel industry can seize opportunities to shift to higher-value production by supplying the automotive, data centre, and aerospace sectors, Deputy Investment, Trade and Industry Minister Sim Tze Tzin said.

He said the industry was transforming beyond its traditional focus on construction and infrastructure, with high-technology sectors opening up new markets for domestic producers.

In the automotive sector, he said a new incentive mechanism (NCM) to be implemented next year would require carmakers seeking lower excise duties to deepen localisation, creating opportunities for domestic steelmakers to supply automotive-grade steel.

“If they want to enjoy our excise duty, lower excise duties, then they have to really, really go deep into localisation -- a genuine localisation,” he told reporters at the 15th Malaysian Iron and Steel Industry Federation (MISIF) Conference on the Status and Outlook of the Industry here today.

He said the mechanism, which will be announced soon, would cover all carmakers, including Japanese, Korean and Chinese brands.

Carmakers would need to increase local sourcing, including replacing imported steel with locally produced materials, he added.

He expressed hope that the move would open up the automotive market to domestic steelmakers, while stressing that the industry must invest in producing automotive-grade steel.

Sim said efforts to replace imported steel in locally manufactured cars had yet to take off seriously due to price competition and the investment required to meet higher safety standards.

Meanwhile, he said Malaysia’s position as a major data centre hub in Asia offered opportunities for the industry to supply products such as server racks, cables and wire harnesses.

He said an industry player had told him its company was moving into supplying server racks for data centres, describing the development positively.

In aerospace, he said Malaysia’s maintenance, repair and overhaul industry needs components that could let steelmakers pursue higher-margin business, even at lower volumes.

He cited a European company producing high-technology steel for aircraft structures as an example of how the industry could move into higher-value applications.

On government support, Sim said steelmakers seeking to invest in more complex production could receive further incentives.

“Several major industry players had already benefited from government incentives, including pioneer status and investment tax allowances.

“But if they want to invest further for a higher complexity, the government will help in terms of further incentives for them,” he said.

He said the government’s goal was to help the domestic steel industry innovate and develop more complex products to meet demands from an increasingly high-technology market.

– BERNAMA