Tata Steel (Thailand) Plc (TSTH), Thailand's largest long steel producer, aims to increase sales of high value-added products from 30% to 40% the next two years to cope with China dumping on the market.
President and chief executive Peeyush Gupta said the company expects the sales volume from high-value products for this fiscal year ending in March to exceed the 320,000 tonnes recorded in the last fiscal year. High-value products include cut-and-bend, small section and special-quality steel bars.
Over the last two years, TSTH has suffered from Chinese dumping of long-shape products, sold at 14% below the market price.
TSTH's market share in the segment decreased to 28-30% from 32-35% two years ago, noted Mr Gupta.
TSTH is joining other steel makers in asking the Commerce Ministry to impose an anti-dumping (AD) duty on Chinese-made steel because of the 9% subsidy given by the mainland government.
"Many Asian nations have implemented AD measures to protect their local industries, including Malaysia, India, Vietnam and Indonesia," he said.
In the first nine months, imports of long-steel products rose significantly by 32% to 1.73 million tonnes, while locally made steel production fell 7% to 2.793 million tonnes.
Although steel demand in Thailand is recovering in the construction and automobile sectors, Mr Gupta said locally made products are not as popular as the subsidised Chinese steel.
Long-steel product demand is expected to surpass 5 million tonnes next year. The record volume of 5.6 million tonnes was set in 2005.
"The domestic steel industry, not only for long products but also flat products, is in the intensive care unit. We have to fight to survive these unfavourable business conditions," he said, adding cost control measures and sales promotions have been developed.
Meanwhile, two local competitors _ G J Steel and Thai Special Steel Industry (TSSI) _ have suspended production.
From July to September, TSTH's second quarter, the company reported a 9% decrease of revenue to 6.43 billion baht with a net loss of 300 million baht, compared to a loss of 399 million the same period last year.
For the first half this year, sales dropped 15% year-on-year to 12.33 billion baht, with a net loss of 501 million baht.
Shares of TSTH closed yesterday on the Stock Exchange of Thailand at 0.77 baht, down one satang, in trade worth 1.6 million baht.
About the author
- Writer: Yuthana Praiwan
Position: Business Reporter