Annual Report (Complete) - MYCRON Steel Berhad
Annual Report (Complete) - MYCRON Steel Berhad
Annual Report (Complete) - MYCRON Steel Berhad
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Chairman’s Statement<br />
(continued)<br />
BUSINESS OUTLOOK (continued)<br />
To feed the country’s manufacturing appetite for CRC, Malaysia has been a substantial importer of CRC, with 2009 showing CRCrelated<br />
product imports of 1.43 million tonnes (2008: 1.62 million tonne). With such a large amount of imported CRC, the opportunities<br />
for the Group, to penetrate new markets, and play its role in import-substitution, is tremendous.<br />
MALAYSIA FLAT STEEL 2009 COLD ROLLED SHEETS<br />
Production<br />
(tonnes)<br />
Import<br />
(tonnes)<br />
Export<br />
(tonnes)<br />
Consumption<br />
(tonnes)<br />
Cold Rolled Coils (CRC) Sheet<br />
Galvanized Zinc Sheets<br />
Color Coated Sheets<br />
Other Metallie Coated Sheets<br />
Tin Plated Sheets<br />
Electro-Galvanized Iron (EGI) Sheets<br />
Cold-Rolled Electrical Tubes<br />
599,706<br />
391,000<br />
212,209<br />
-<br />
140,000<br />
95,800<br />
-<br />
817,838<br />
244,131<br />
25,806<br />
17,659<br />
57,947<br />
178,571<br />
83,581<br />
78,323<br />
28,515<br />
35,727<br />
17,630<br />
41,044<br />
22,904<br />
5,112<br />
1,339,221<br />
606,616<br />
202,288<br />
29<br />
156,903<br />
251,467<br />
78,469<br />
1,438,715<br />
1,425,533<br />
229,255<br />
2,634,993<br />
(Source: MISIF, Malaysian Iron and <strong>Steel</strong> Industry Federation)<br />
Operationally, the Group’s sale of CRC, to the automotive sector has strengthened, and is expected to constitute 10% of product mix,<br />
by the end of the next financial year.<br />
In the long-term, the automotive sector will play a significant part, in the demand for domestic CRC, much of which is currently being<br />
imported. In 2009, the Malaysian Automotive Association reported domestic assembly of 489,000 new passenger and commercial<br />
vehicles. With a typical passenger car containing 1.0 tonne of steel, of which CRC steel content is 0.5 tonnes, the automotive industry’s<br />
estimated consumption of 245,000 tonnes of CRC annually, bodes well for this sector.<br />
During the year, the Group had succeeded in expanding, its business to the automotive sector, with increased commitments to purchase<br />
the Group’s CRC products, by Proton, for use by its suppliers and vendors. In this regard, the Group was recently awarded, a contract<br />
to supply CRC to Proton’s vendors, totaling 12,000 tonnes for one year. At current prices, this contract is worth more than RM 30 million<br />
in sales.<br />
Another positive development was Perodua’s recently completed test and evaluation of the Group’s CRC, for use in 23 of its motor<br />
vehicle components. Should all go well, the Group is targeting to supply CRC to Perodua, for the Myvi replacement model, scheduled<br />
to be launched in 2011.<br />
Apart from the automotive sector, the Group has made significant penetration, in the supply of CRC to the <strong>Steel</strong>-Galvanizing & Colour-<br />
Coating sector, in particular the <strong>Steel</strong>-Roofing and the Electro-Galvanizing manufacturers. Demand for the Group’s high quality CRC, by<br />
these sectors, have been growing steadily, and is expected to constitute 15 – 20 % of product mix, by the end of the next financial year.<br />
Other customer sectors, such as <strong>Steel</strong> Service Centres, Palm-Oil & Petroleum Drum fabricators, and <strong>Steel</strong> Pipe and Conduit manufacturers,<br />
are expected to remain relatively stable.<br />
As the Group enters a new decade, it will remain focused in its core business activity, of being the CRC supplier of choice in Malaysia.<br />
pg 6 | Mycron <strong>Steel</strong> <strong>Berhad</strong>