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Friday, May 9, 2008

Steel, cement sectors being liberalised

MALAYSIA has moved fast towards liberalising the steel and cement industries, which supply the main components for construction, says International Trade and Industry Minister Tan Sri Muhyiddin Mohd Yassin.

"The steel and cement industries have been progressively liberalised and further deregulation is expected for the steel market in the next few days with regard to prices and import-export restriction," he told a media briefing after launching Metaltech Malaysia 2008 in Kuala Lumpur yesterday.

"For the cement sector, we will gradually move into the Automatic Price Mechanism where the price of cement is determined by the demand and supply," he added.

Prime Minister Datuk Seri Abdullah Ahmad Badawi is expected to announce measures to combat inflationary trend in the market, which would include building materials.

"Only in certain sectors will there be a need for government intervention like the food sector. Other areas such as manufacturing will be more open to market forces," said Muhyiddin.

Trade-Link Exhibition Services Sdn Bhd chairman Datuk Zainal Abidin Ahmad said industry players are hoping for a free market equilibrium.

The manufacturing industry, identified as one of the key growth areas for the economy, is also facing challenges in the form of high cost of steel imports with the imposition of tax as well as difficulties in sourcing for adequate supply of steel bars of certain sizes.

The Domestic Trade and Consumer Affairs Ministry raised the ceiling price for steel bars and billets by 20 per cent in April last year.

The disparity between government-controlled prices and the international prices, Zainal said, has resulted in some millers preferring to export their supply.

Earlier, in his address, Muhyiddin said Malaysia needs to establish itself as an ideal location for outsourcing.

"The engineering supporting industry in Malaysia is internationally recognised for the quality of products and services and has the capability to support the machinery and equipment (M&E) industries," he said.

The government is encouraging local engineering supporting companies to position themselves to become total solutions providers, offering integrated services from production conception to serial production.

Meanwhile, the Malaysian Industrial Development Authority (Mida) has arranged business matching meetings for the outsourcing requirements of companies from France, Denmark, Italy, the United Arab Emirates and Singapore in conjunction with Metaltech Malaysia 2008.

With more than 1,500 exhibiting companies, the five-day event is expected to attract 25,000 trade visitors from around the region.

Mida is also holding a two-day national seminar on business opportunities in the M&E industries.

By New Straits Times (by Rupa Damodaran)

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