M&As to help Malaysian steel makers tap demand in ASEAN

The Malaysian Iron and Steel Industry Federation (Misif) President Soh Thian Lai said that mergers and acquisitions (M&As) are needed among Malaysian steel manufacturers to better tap the strong demand for steel products in the ASEAN region. He said that Malaysian steel players must think about this, since a large entity can increase production efficiency and obtain cost savings and economies of scale. He also said that companies can look into other ASEAN countries like Indonesia and the Philippines. According to South East Asia Iron and Steel Institute Chairman Chow Chong Long, there is no entity in the region to tap the strong demand for steel products in ASEAN."

Many big global players in steel are also looking at this region for growth. It is already happening. The Japanese and Chinese players are coming here to form strategic alliances," said Chow. Soh stated the steel industry in Malaysia was fragmented, highly cyclical and intensely competitive." We need consolidation to face the challenges of a volatile world economy. Malaysia is not spared. Look at the recent merger of Nippon Steel and Sumitomo Metal Industries, which created the world's second biggest steelmaker."