Acerinox's US$1.6b steel plant to boost local economy

[ 18-03-2009 ]

Acerinox's US$1.6b steel plant to boost local economy

JOHOR BAHRU: The construction of a US$1.6 billion (RM5.92 billion) fully integrated stainless steel plant in Tanjung Langsat, Pasir Gudang will directly benefit the local economy, said Menteri Besar Datuk Abdul Ghani Othman here yesterday.

He said 20% of the US$1.6 billion investment in the plant will eventually go into the local economy through Malaysian contractors, consultants and suppliers hired to get the project off the ground.

"We welcome this policy of local participation because it will have far-reaching multiplier effects on the local economy," he said at the ground-breaking ceremony of Bahru Stainless Sdn Bhd's plant at Pasir Gudang, yesterday.

Bahru Stainless Sdn Bhd is a joint venture company between Spain's Acerinox SA, the largest stainless steel producer in the world and its partner Nisshin Steel from Japan.

The investment by Acerinox and Nisshin on the stainless steel plant in Tanjung Langsat is the single largest foreign direct investment (FDI) in Johor.

"This project by the joint venture company, Bahru Stainless is yet another testimony of Johor's growing reputation as a world class destination for capital intensive, high technology industries," he said.

When fully developed, it has the potential to provide 1,600 jobs and generate a multitude of spin-off activities for the local economy which will be of considerable value to Johor.

The plant, sited at a 140-hectare piece of land in Tanjung Langsat, will be an integrated modern factory producing one million tonnes of stainless steel a year.

The plant also has the potential of producing 600,000 tonnes of cold rolled steel sheets a year when it reaches peak capacity.

Approximately 30% of the plant's output will be for Malaysian consumption which means tremendous savings for the local industries dependent on stainless steel imports.

Meanwhile, Acerinox's chairman Rafael Naranjo in his speech said US$320 million will be invested during the first phase of the plant's construction.

The main equipment has already been ordered and civil works will start soon, he said.

"From this year, we will start supplying finished material and at the end of next year, cold rolled products will begin to be produced on this site.

"Likewise, from the end of next year Bahru Stainless will increasingly and significantly contribute to increase the exports from Malaysia to the world," he said.

Naranjo also said Acerinox through its investment in its plant in Tanjung Langsat, the first for the company in Asia, will try to enhance its development and expansion into the future.

Source: http://www.theedgemalaysia.com/business-news/2022-acerinoxs-us16b-steel-plant-to-boost-local-economy.html