Mycron Steel Bhd

It is looking to expand the revenue contribution from its overseas market to about 15% over the next three years, boosted by growing requests for cold-rolled coils (CRC) from abroad.

It hopes of diversifying the company’s customer base as the domestic market currently contributed about 97% to its revenue. They are now exporting CRC in small volumes to Sri Lanka, Vietnam and Indonesia.

Following the global financial crisis, the regional market price for hot-rolled coils (HRC), the base raw material for the manufacture of CRC, had tumbled from US$1,100 per tonne to US$600 per tonne in September 2008. The regional price for CRC has followed suit, falling from US$1,250 to US$750 per tonne.

Due to this, the margin or spread between international HRC and CRC prices had been consistent and healthy, ranging from US$100 to US$120 per tonne.

Also, with lower prices for HRC and CRC, the company would be enjoying the benefits of having less money tied up in inventory and debtors, hence improved cash position, while enjoying the same gross profit margins as before.

Mycron currently supplies 12% of Proton’s CRC needs and plans to increase this to 15% in view of the national carmaker’s major localisation plan to reduce CRC imports.