KUALA LUMPUR: Lion Corporation Bhd had on Wednesday explained the temporary suspension of operations of Megasteel Sdn Bhd was due to losses caused by excessive dumping of steel products by foreign millers.
Lion Corp, which owns 79% of Megasteel, said the Banting plant had been suffering losses in the past few years due to the dumping and it had been operating intermittently depending on market conditions.
It said the January 2016 announcement by the Ministry of International Trade and Industry that the government had terminated the investigation for the safeguard petition on imported hot rolled coils (HRC) had further impacted Megasteel’s operations which resulted in the retrenchment of its staff.
“The company had in its interim financial reports for the quarters ended March 31, 2016 and June 30, 2016 reported that Megasteel had temporarily ceased operation following the aforesaid government decision,” it said.
Lion Diversified Holdings Bhd owns the remaining 21% of Megasteel.
Megasteel is the country’s first integrated steel miller, producing flat steel products including 3.2 million tonnes of hot rolled coils (HRC) and 1.45 million tonnes of cold rolled coils (CRC) per annum.
HRC is the raw material for CRC which is used in white good including cars. Industry experts say the current Malaysian market is flooded with imported steel goods, especially China, which is believed to be sold below production costs of the local players.
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