Iskandar Regional Development Authority

March 13, 2008 09:27 ET

Malaysia Beats India and China to Land US$1.5 Billion Steel Project

LONDON, UNITED KINGDOM--(Marketwire - March 13, 2008) - One of the world's largest steelmakers is investing more than US$1.5 billion to build a stainless steel plant in Johor state's Iskandar Development Region, at the southern-most tip of the Malaysian peninsula.

The plant, a joint venture between steel giants Acerinox SA of Spain and Nisshin Steel of Japan, will be Acerinox' first production plant in Asia and its 4th around the world following the opening of plants in Spain, the USA and South Africa.

The investment is a further expansion of the Spanish company's already established relationship with Johor state where it operates a number of steel facilities.

Speaking about the investment, Datuk Abdul Ghani Othman, Chief Minister of Johor said: 'the investment is the single biggest foreign direct investment (FDI) secured by Johor state to date and reinforces Iskandar's position as a world-class destination for capital intensive, high-technology industries in the state.'

According to Ghani the decision to locate the plant in Iskandar was made for a number of strategic reasons including the development's location on the main shipping routes between India and China; the excellent transportation links to Asia's main growth markets and the highly favourable incentive schemes being offered by the government to attract FDI to Iskandar.

It is also a reflection of the strength of the Malaysian economy which recorded a 7.3% GDP growth for the last quarter of 2007 - the best quarterly result in four years - and an overall GDP growth of 6.3% for the year.

'We have always looked at this area as an opportunity to invest,' said Acerinox CEO Rafael Naranjo, adding that Acerinox had been on a worldwide search for a suitable location and considered India, China and other southeast Asian countries before finally choosing Malaysia.

Asia consumes more than half of the worlds stainless steel output and so the new facility, which will be one of the most high-tech and modern facilities of its kind, will be well placed to benefit from Asia's strong growth and rapid development in the future.

The new plant will be built on 140 hectares of land at Tanjung Langsat, near Johor's capital of Johor Bahru, and will be an integrated modern factory producing one million tonnes of stainless steel a year or 600,000 tonnes of cold-rolled steel sheets when it reaches peak capacity.

Construction of the plant will be done in phases with building work on phase 1 commencing almost immediately.

Under phase 1 a US$320 million production line will be built and come on line in 2011 with a capacity of 240,000 tonnes of which 182,000 tonnes would be cold-rolled steel. Further phases will then build on the foundations of the first.

Since 2005, Johor has been the most popular destination for foreign direct investment in Malaysia, attracting a total of US$9.2 billion in new manufacturing projects of which nearly three quarters was FDI.

Contact Information

  • Iskandar Regional Development Authority
    Nasser Ismail
    Vice President Strategic Communication