Steel industry expected to bounce back in 2 to 3 years’ time
GEORGE TOWN: Steel manufacturers, who have been facing tough times in recent years, expect businesses to pick up within the next two to three years.
Tatt Giap Group Bhd chairman Datuk Thomas Liang said the deferment of mega projects in the country, such as the Kuala Lumpur-Singapore High-Speed Rail project and the East Coast Rail Link project, had impacted the industry.
Apart from domestic factors, the challenging climate of the steel industry internationally also impacted the commodity as well.
“For example, an anti-dumping policy, which was introduced last year in America — had affected many large companies.
“So, imagine the situation for us as a small industry player in this business.
“The deferment of the mega projects had, of course, affected us, but I foresee the industry making a comeback. This is just a temporary setback.
“For development, use of steel for any infrastructures and properties will still be there. So, the future is promising,” he said when met before the group’s annual general meeting, here, yesterday.
Recently, the group had secured a new shareholder, Dynaciate Engineering Sdn Bhd, after the latter acquired a 12.95 per cent stake, or 22.1 million shares.
Liang said the new partner was from the steel manufacturing business and the company had been awarded a sub-contract business worth RM67 million recently.
In recent years, he admitted there was a lack of activities in the group, hence the new shareholder announcement could boost its business.
“With them coming into the picture, along with five contracts worth RM67 million, this can significantly grow our business,” he added.
According to the financial period ending August 31, the company reported a revenue of RM5.01 million and loss before tax of RM3.01 million, a RM16.91 million, or 77.1 per cent, drop from RM21.92 million in the same period last year.
Due to slower business, the group is undergoing rationalisation of its assets.
The group’s managing director Lee Poay Keong said the company would focus on other areas to improve the company’s revenue.
At the moment, their attention will be shifted to projects in Johor Baru, Melaka and Pahang.
“This will be our main source of revenue.
“With the rationalisation of assets, money will come in and we will look into property development,” he said.