Kuala Lumpur, Dec 19 – The government must assess the impact of rising electricity tariffs, wages and the impending toll increases as the higher costs will push the local iron and steel sector into the doldrums.
In a statement here today, Malaysian Iron and Steel Industry Federation (MISIF) President, Datuk Soh Thian Lai, urged the government to consider the move to raise toll charges next year.
News reports had indicated that the toll rates would be increased by between 50 sen and RM2 effective Jan 1, 2014.
Soh said the recent wave of government’s regulatory decisions, such as the minimum wage policy, extension of the retirement age, increase in electricity tariffs and fuel prices, were already having adverse impact on the cost of doing business.
“They would contribute higher manufacturing costs, thus affecting the viability and competitiveness of the domestic iron and steel industry.
“The recent announcement on the increase in toll charges and the effects on logistics and transport costs would compound matters and push the iron and steel industry further into the doldrums,” he said.
He said the usage of heavy vehicles to transport iron and steel products on alternative roads was not practical mainly due to safety concern of people residing along the secondary roads linking the rural areas.
Moreover, narrow passage restrictions, timely and efficient delivery and poor road conditions were other critical factors that prevented the usage of alternative roads, he said.
Soh said the government’s trade liberalisation processes had opened up the iron and steel industry and made it efficient and competitive.
“However, the industry’s competitiveness, sustainability and prevailing low profit margins would be severely eroded away following a spate of increasing costs over the year,” he said.
He said the industry faced fierce competition from imported steel products from all over the world and there has been severe influx of imported iron and steel materials into the country.
“All our efforts in penetrating the export markets painstakingly built over the years would also be derailed,” Soh said.
– Bernama
