Miti to work with steel industry on consolidation incentive

KUALA LUMPUR: The International Trade and Industry Ministry (Miti) will be presenting a comprehensive proposal to the Ministry of Finance (MOF) on consolidation incentives for the local steel industry, said Deputy Minister Ong Kian Ming.

He said the ministry will work together with the parties concerned to evaluate their requests and work with the MOF to come out with win-win solutions for all parties.

“Two large public listed steel companies are going to merge this year.

“So we are waiting to see the details and see how we can support them,” he told reporters at the 2019 Trade Forum on the Malaysian Iron and Steel Industry.

Ann Joo Resources Bhd and Southern Steel Bhd recently announced the setting up of a 55:45 joint venture company to synergise opportunities in the long product steel manufacturing business.

Ong said that the consolidation incentive will be on a case-by-case basis.

“A merger is a complicated process and there will be certain tax incentives and exemptions that the parties will be looking for. For example, the waiver of certain stamp duties related to property transactions.. this is part and parcel of what needs to be presented to the MOF,” he said, adding that, as the ministry in charge of the steel industry, it will convey the industry’s needs to the MOF.

Ong said Miti has outlined an action framework in a white paper on the iron and steel industry, which includes several short-term measures to ease the uncertainties faced by the industry while undertaking due diligence in line with the 12th Malaysia Plan and the new Industrial Master Plan under the ministry. The ministry expects to present the white paper to the cabinet by year-end.