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KUALA
LUMPUR, April 11 (Bernama) -- The FMM Aluminum Manufacturers Group of
Malaysia (FMM AMGM) has proposed a ban on all aluminum scrap exports in
view of the high cost of aluminum ingots.
All aluminum scrap could be used by secondary alloy industries from this
year onwards, it said in a memorandum submitted for the 2000 Dialogue with
the Ministry of International Trade and Industry (MITI).
It believed that some aluminum scrap had been exported by under declaring the amount exported or being declared under a different description in
order to be eligible for lower or no duty.
The aluminum industry in Malaysia had a total sales turnover of RM1.485
billion in 1999.
Since aluminum scrap makes up about 47 percent (142,000 metric tonnes) of
raw materials requirement for the industry in 1999, the amount of imports
by the industry would be substantially reduced if the aluminum scrap is
retained for local consumption, it said.
The group said aluminum was an environmentally-friendly material that
could be recycled using only 5.0 percent of the energy required for the
production of raw material. Aluminum therefore retains a high scrap value
while the aluminum scrap used in local aluminum product is about 47
percent of total raw materials used.
It explained that prior to the economic downturn, the domestic aluminum scrap price in Malaysia was generally more expensive than that of the
international market. As such, cheaper aluminum scrap was then imported
by local manufacturers to maintain their competitiveness.
But with the drop in the ringgit, manufacturers found it expensive to
import.
FMM AMGM said the aluminum available in the country was depleting and was
insufficient to cater for the industry needs.
To date, there has been no official ban on the export of aluminum scrap
yet although administratively, the ban is valid.
FMM AMGM also asked for MITI's assistance in helping aluminium product
manufacturers to obtain natural gas at a lower cost because the pricing of
Malaysian natural gas was not competitive in comparision to the United
States.
It felt that it was unfair that the price of natural gas, being a local
commodity, was pegged to the "Singapore Posted Price Index" and
the US dollar.
It added that its members, which represented about 73 percent of the total
output in the industry, collectively consumed some 17 million cu. metres
per annum or about RM10 million in 1999.
Another proposal by FMM AMGM was that the current labour contract for
skilled foreign workers be extended from six years to a maximum of 10
years.
Meanwhile, FMM Malaysia Ceramics Industry Group (FMM MCIG) in a separate
memorandum submitted to the dialogue, propopsed that the import duty and
sales tax on alumina balls be abolished as they were not produced locally.
Alumina balls, which are used for grinding more refined ceramic raw
materials, are subject to a 5.0 percent import duty and 10 percent sales
tax.
FMM MCIG also proposed that the 10 percent sales tax on clay roofing tiles
be abolished because all other clay bricks, pavers and tiles and clay
pipes, and also cement roofing tiles, are exempted from sales tax.
On natural gas, it proposed that the government formulated a stable price
structure for industrial users that was benchmarked against a
comparatively stable energy equivalent representation of market value and
should be lower than the hydrocarbon value.
It pointed out that the cost of natural gas to industrial, commercial and
domestic sectors in industrialised counteries and even Indonesia was fixed
for a particular tariff category similar to the tariff structure for
electricity.
In order to encourage shippers to utilise local ports, FMM MCIG proposed
that the government liase with all local ports to amend existing
provisions for free storage by replacing "five days free
storage" to " five working days free storage".
Meanwhile, FMM Concrete Products Industry Group (FMM CPIG) in its
memorandum proposed that the Goods Vehicle Levy exemption be extended to
several other concrete products.
They include segmental precast reinforced concrete linings for bored
tunnels, precast building components, reinforced concrete square piles,
precast concrete manholes, prestressed concrete beams and box girders,
concrete railways sleepers, concrete paving blocks, prestressed spun
concrete poles and precast concrete coastal erosion slabs.
The benefits arising from the increase in exports would more than offset
the loss in the collection of levies, it added.
The Goods Vehicle Levy (Exemption) (Amendment) (No 2) Order 1999, which
came into effect on June 3, 1999, provided a 50 percent levy exemption for
14 construction materials related products.
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