Tata Steel presses govt over cheap china imports
Cheaper wire rods from China, using an export tariff privilege, have dented the prospects of local manufacturer Tata Steel (Thailand) and the company is again urging the Thai government to take action.
Peeyush Gupta, president and chief executive officer of Tata Steel (Thailand), said yesterday that production cost of steel in Thailand has increased due to the rising prices of utilities, fuel and wages. But the company could not raise the prices of its products such as round bars, deformed bars, high carbon-wire rods, and low carbon-wire rods.
Wire rods are normally sold in a price range of Bt23,000 to Bt30,000 per tonne, depending on the types of products. In fact, wire-rod prices have declined by 5 per cent over the past six months. This has affected the company’s business operations as it could not run at full capacity because consumers had shifted to using cheaper wire rods from China.
Thana Ruangsilasingha, chief operating officer of Tata Steel (Thailand), said that wire rods imported from China received tax privileges for exports from the Chinese government, enabling them to have competitive prices when compared with wire rods produced domestically.
In fiscal year 2012 – from April 2011 to March 2012 – the company’s total steel production was 1.14 million tonnes, of which 500,000 tonnes were high carbon-wire rods and low carbon-wire rods.
"The influx of wire rods from China into the country by exploiting an export tariff privilege has led to steel producers in Thailand losing opportunities," said Gupta.
Tata Steel (Thailand) has a full capacity of 1.7 million tonnes of steel, of which 50 per cent are wire rods.
Gupta said the company has sent a letter to state agencies such as the Commerce Ministry and the Customs Department to ask for fairness in this matter in the interests of domestic steel producers. However, there has been no action so far from the government.
Regarding business direction in fiscal year 2013, he said the company would increase its steel capacity by 8-10 per cent in order to boost sales by 10-12 per cent.
The company reported sales of Bt26.18 billion in fiscal year 2012, down 2 per cent from a year earlier, due to the severe floods last year. The company also plans to increase special wire rod production from 28 per cent to 33 per cent of total production.
He said Thailand has a competitive edge compared to other countries in Asean. "Thailand will remain our main production base. Investments in other Asean countries will be on setting up sales and marketing offices," he said.
