Chinese investors are actively strengthening their growing position in Southeast Asia and plan to build another integrated steel plant in Malaysia in the near future. China Metallurgical Group, China Communications Industry Investment Holdings Co., Ltd. and Wen'an Iron & Steel Co., Ltd. recently announced that they plan to build a comprehensive steel plant in the Samalaju Industrial Park in Bintulu, Malaysia. The plant's design capacity has increased from the initial 3.5 million tons / year to 10 million tons / year, will become the largest steel production plant in Southeast Asia. According to the statement, the project is expected to begin earthwork by the end of 2019 and construction will begin in mid-2020. The details of the production portfolio have not been disclosed.
This is not the first time Chinese companies have invested in the Malaysian steel industry this year. In July this year, China's Hebei Xinwu'an Iron and Steel Group Co., Ltd. and China Metallurgical Group jointly announced plans to launch a new 5 million tons/year comprehensive steel construction project in the Samalaju Industrial Park in Bintulu.
Most Malaysian local steel producers believe that Chinese investors' plans are too ambitious, and further growth in steel production will weigh on Malaysia's domestic market, leading to a surge in exports. Considering that domestic demand for finished steel products in Malaysia increased by only 3.5% last year, the Malaysian construction industry is expected to grow by only 3% in 2019. Relevant experts estimate that the export market will remain the main development target of the new steel mills.
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