Malaysians forecast growth.

The Malaysian Lion group, whose aim is to become the low cost steelmaker in the region, expects steel-sector profits to reach about 91M [pounds sterling] by fiscal 2002 with the main contribution coming from the Megasteel HRC mill which is using thin-slab casting technology.

William

Cheng, Lion's president, said Megasteel was expected to generate profits of 18.2M [pounds sterling] in fiscal 2001 and more than 54.6M [pounds sterling] in fiscal 2002. Cheng said that combined with the existing Amsteel Mills operations the overall contribution to group profits would be about 91M [pounds sterling]. He added that the group's steel business would for the core of the company's operations after the Lion group is restructured.

The Megasteel subsidiary will be owned 90% by Lion Corporation after the restructuring while Lion Land will control 99.8% of Amsteel Mills. Megasteel occupies a 400-acre site in Banting, Selangor and is currently operating at 45-50% capacity with an overall design capacity of 2.5Mt. Cheng said the investment cost per tonne for Megasteel was $300 compared with other technologies and processes costing more than $1000/t.

Labour costs were less than 1% of the total operation at full capacity compared, he claimed, with 8-15% for other operators. The Lion group president said that the mill was capable of substituting imports of HRCs worth some 528.8M [pounds sterling] a year for Malaysia. By 2001 the plant will be running at full capacity. The unit is supplying the local market at present but some 30% of finished output is being exported indirectly by clients in finished products.