Govt ready to offer more incentives to steel manufacturers
PETALING JAYA: The government is prepared to offer additional incentives to local steel manufacturers investing in high-value products, including automotive-grade steel and high-tech components.
The Malaysian government is ready to provide further incentives to steel manufacturers investing in high-value products such as automotive-grade steel and high-tech components. Deputy Investment, Trade and Industry Minister Sim Tze Tzin announced this move aims to assist the industry in upgrading its production capabilities to meet rising demand from sectors like aerospace, automotive, and data centres.
The steel industry in Malaysia is valued at approximately RM35 billion, accounting for 1.7% of the country's GDP. While local manufacturers have previously received incentives like pioneer status and investment tax allowances, the government is prepared to assist them further with additional incentives for more complex product production.
Malaysia's steel industry primarily relies on the construction sector, but emerging opportunities exist in aerospace, automotive, and data centre industries, with high-profit margins achievable, even at low production volumes. In the aerospace sector, local manufacturers can supply high-tech steel components to the aerospace maintenance, repair, and overhaul industry.
The automotive sector requires more investment in producing automotive-grade steel to meet stricter safety standards. The government has developed a new incentive mechanism, the New Customised Mechanism, which is set to be implemented next year to encourage vehicle manufacturers to use more locally produced steel components. Currently, Malaysia imports about 60% of its steel requirements, emphasizing the need to strengthen domestic production and reduce reliance on imports.
The data centre industry also presents opportunities for local steel manufacturers to supply components like server racks and related equipment.
Written by urgent.news from New Straits Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
