KOTA KINABALU: The Sabah Housing and Real Estate Developers Association (Shareda) fully supports the state government’s decision to temporary bar the export of scrap iron out of Sabah.
In response to the announcement made by Chief Minister Datuk Seri Hajiji Haji Noor on Friday, Shareda president Datuk Chua Soon Ping agrees that the temporary bar will ensure sufficient raw material supply for the local steel and construction industry.
“With sufficient supply of raw material, we no longer need to import them at an inflated price, which will in turn stabilize the price of billets and rebars. Billets and rebars are key ingredients in the construction industry,” said Chua in a statement on Saturday.
“When the supply and cost of construction materials are stabilized, we become less reliant on imports, the saving will be directly reflected on the house prices for the people in Sabah,” he added.
The temporary ban is also likely to encourage the growth of downstream industries to the steel industry. Value-added products can be manufactured, and it will create more job opportunities for Sabahans.
With an abundant supply of raw material, local manufacturers can also increase production, thus achieving economies of scale. The ripple effect and economic impact is huge, encouraging more investment as well as employment, which is particularly needed at this time.
“Besides optimizing the price and supply of steel in Sabah, we also hope the government would look into stabilizing the price of other construction materials, such as cement.
The cost of construction materials in Sabah has always been higher than that in Peninsular Malaysia, which resulted in a higher house price here,” added Chua.
He said if we can find ways to optimize the supply chain of all construction materials, such as by reducing the layers of middlemen, it will effectively bring down the cost of supply, which will benefit the property development as well as the construction of infrastructure in the state.
“We are confident with the leadership of the state in introducing policies to revive the economy of Sabah,” Chua concluded.
Steel Industries (Sabah) Sdn Bhd also welcomes the decision to temporary ban the export of scrap iron.
Its Executive Director, Azrul Bin Ahmad, pointed out that for the steel mill, it is a volume game and thus to ensure enough supply of raw material is utmost important.
Therefore, the price of the billets, which raw material is scrap iron has been much affected by the price of scrap iron. It impacts on the production costs and reflected in the steel bar selling price.
For the past, he said the steel bar price in Sabah is very volatile due to the billets cost. Recently the steel bar price has been in the uptrend due to the rising cost of billets.
“With the State Government’s decision, we can expect not only stable supply of billets but more so on its pricing.
“We are confident that this will have achieved the goal of ensuring sufficient raw material supply for the local steel and construction industry,” he said.
Sabah has barred the exports of scrap iron temporarily to ensure sufficient raw material for the local steel industry to maintain its operations.
Hajiji said the ban would be lifted once the mechanism has been formulated for the imposition of the RM200 per metric tonne State Sales Tax on scrap iron exports.
However, exports of scrap metals like copper, aluminium, precious metals such as platinum, gold, titanium and stainless steel are exempted from the ban.
In a statement here on Friday, Hajiji said the State Cabinet made the decision since there was an acute shortage of raw materials for billet and rebar productions in Sabah.