KOTA KINABALU: The Federation of Sabah Industries (FSI) welcomed the temporary ban on export of scrap iron out of Sabah until RM200 per ton of export sale tax is in place.
Its President, Richard Lim, expressed his gratitude to Chief Minister Datuk Seri Hajiji Hj Noor for looking after the interest of the local industries by taking this bold and commendable step to ensure that raw material required to feed local downstream industries are retained in the State.
He said the local steel industries have been crying for years on lack of scrap iron to feed their steel mill as more than half of scrap iron, a scarce recycled-resource generated within Sabah, are exported out of the State.
“Due to high logistic costs and world-wide supply chain disruption caused by the ongoing Covid-19 pandemic, importing scrap iron in any substantial quantities to keep production going at full steam is not viable, if not impossible.
“This has led to shortage of the more competitively priced locally manufactured steel bar/rebar and the need to fill this shortfall with more pricey imports causes the market price level of steel bar/rebar in the State to increase sharply.
“This has adversely impacted the local construction industries, in particular housing developments,” he said in a statement today.
With the above measure taken by the State, FSI is confident that sufficient scrap iron will be retained to feed the local steel industries and price increase will be mitigated.
“And, with an abundance of raw material retained for downstream processing, FSI is certain that there will be further spin-offs benefiting State’s economy and accompanying job opportunities for the locals,” he said.
Further, FSI agrees with the State Government that this policy on export control of scrap iron will be a catalyst to spur further investment in related downstream industries, such as wire ropes production, and similar investments in the East Coast areas where industrialisation is badly needed to fast-track regional growth.