Millcon urges local steel for PPPs

Millcon urges local steel for PPPs

Steel bars, wire rod steel and structural steel are pictured at Millcon Steel factory in Rayong. The steel is used in construction and other industries.
Steel bars, wire rod steel and structural steel are pictured at Millcon Steel factory in Rayong. The steel is used in construction and other industries.

SET-listed Millcon Steel, a Thai steel manufacturer, is calling on the government to use local steel in 10 infrastructure projects under public private partnership (PPP) to bolster the industry and protect the domestic market against cheaper steel imports from China and Vietnam.

The move is not a trade barrier as defined by the World Trade Organization (WTO), according to the company.

"This is not in conflict with WTO regulations because Thailand did not sign the Government Procurement Agreement [GPA] under the WTO," said Millcon president and executive officer Pravit Horungruang.

Though it is a WTO member, Thailand can benefit from a "legal gap" in the WTO to implement certain measures to support domestic industry as long as it does not sign the GPA, he said, referring to an earlier comment made by the Comptroller-General's Department.

Mr Pravit said local manufacturers need state help on PPP projects, which will use several thousand tonnes of steel.

"Domestic steel makers have proposed the idea to Deputy Prime Minister Wissanu Krea-ngam. We hope the government will come up with new actions to help us," he said.

Steel consumption in Thailand has slowed for many years. Cheaper steel imports and the pandemic's impact, which delayed construction projects, worsened the situation.

Consumption in 2020 is expected to decrease to 16.7 million tonnes from 18.6 million tonnes last year, according to Millcon.

"If the government agrees to use domestic steel in the PPP projects, local demand for steel will be stimulated," said Mr Pravit.

The largest four of the 10 projects in terms of required steel include a 224-billion-baht high-speed train system linking three airports, which is expected to use up to 900,000 tonnes of steel, the most among the 10 projects.

A 179-billion-baht Sino-Thai high-speed railway development is projected to need 800,00 tonnes.

The 155-billion-baht Laem Chabang deep-sea port expansion will use 750,000 tonnes.

The 122-billion-baht Orange Line, an electric train system linking Bang Khun Non with Min Buri in Bangkok, will require 430,000 tonnes of steel.

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