Malaysia Beats India and China to Land US$1.5 Billion Steel Project

Thursday, 13. March 2008 15:05
LONDON, UNITED KINGDOM--(Marketwire - March 13, 2008) - One of the
world's largest steelmakers is investing more than US$1.5 billion to
build a stainless steel plant in Johor state's Iskandar Development
Region, at the southern-most tip of the Malaysian peninsula.

The plant, a joint venture between steel giants Acerinox SA of Spain
and Nisshin Steel of Japan, will be Acerinox' first production plant
in Asia and its 4th around the world following the opening of plants
in Spain, the USA and South Africa.

The investment is a further expansion of the Spanish company's
already established relationship with Johor state where it operates a
number of steel facilities.

Speaking about the investment, Datuk Abdul Ghani Othman, Chief
Minister of Johor said: 'the investment is the single biggest foreign
direct investment (FDI) secured by Johor state to date and reinforces
Iskandar's position as a world-class destination for capital
intensive, high-technology industries in the state.'

According to Ghani the decision to locate the plant in Iskandar was
made for a number of strategic reasons including the development's
location on the main shipping routes between India and China; the
excellent transportation links to Asia's main growth markets and the
highly favourable incentive schemes being offered by the government
to attract FDI to Iskandar.

It is also a reflection of the strength of the Malaysian economy
which recorded a 7.3% GDP growth for the last quarter of 2007 - the
best quarterly result in four years - and an overall GDP growth of
6.3% for the year.

'We have always looked at this area as an opportunity to invest,'
said Acerinox CEO Rafael Naranjo, adding that Acerinox had been on a
worldwide search for a suitable location and considered India, China
and other southeast Asian countries before finally choosing Malaysia.

Asia consumes more than half of the worlds stainless steel output and
so the new facility, which will be one of the most high-tech and
modern facilities of its kind, will be well placed to benefit from
Asia's strong growth and rapid development in the future.

The new plant will be built on 140 hectares of land at Tanjung
Langsat, near Johor's capital of Johor Bahru, and will be an
integrated modern factory producing one million tonnes of stainless
steel a year or 600,000 tonnes of cold-rolled steel sheets when it
reaches peak capacity.

Construction of the plant will be done in phases with building work
on phase 1 commencing almost immediately.

Under phase 1 a US$320 million production line will be built and come
on line in 2011 with a capacity of 240,000 tonnes of which 182,000
tonnes would be cold-rolled steel. Further phases will then build on
the foundations of the first.

Since 2005, Johor has been the most popular destination for foreign
direct investment in Malaysia, attracting a total of US$9.2 billion
in new manufacturing projects of which nearly three quarters was FDI.
Contacts:
Iskandar Regional Development Authority
Nasser Ismail
Vice President Strategic Communication
Email: nasser@irda.com.my
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Author:
Hugin
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