Steel Companies in Myanmar Expand Production amid Robust Demand

According to the latest reports, two steel manufacturing companies in the Thilawa Special Economic Zone near Yangon are ramping up production and set to expand their markets and products.

JFE Meranti Myanmar Co Ltd (JMM) announced last week that it is set to introduce its first locally produced coated-steel products under the brand ALZU this December and the products are intended both for local and export market. The products are designed and manufactured by JMM in Myanmar for use in roofing, walling, and other related applications for a variety of industrial, commercial, residential, and institutional projects.
The company is a joint venture between Japanese companies JFE Steel Corp, JFE Shoji Trade Corp, Marubeni-Itochu Steel Inc, and Hanwa Co Ltd, and Singapore-based Meranti Steel Pte Ltd. JMM. is a USD 85 million subsidiary owned by a Singapore-based holding company whose largest stakeholder is Japan-based JFE Steel Corp.

JMM also plans to begin production of three additional painted and metal coated steel products for launch in 2020. It expects to soon become Myanmar's largest producer of coated steel.

Apart from this, Vietnam-based PEB Steel announced that it is discussing potential business opportunities with Singapore Business Federation (SBF) members in Myanmar. Twenty Singaporean companies visited Myanmar to explore opportunities and partnership in the Myanmar business and construction sector. PEB specialises in the design, fabrication, and erection of pre-engineered steel buildings, steel structures for factories, warehouses, showrooms, commercial/trade centres, supermarkets, sports stadiums, and exhibition halls. Currently, PEB produces steel products for the local market and also exports to ASEAN countries. It produces 25,000 tonnes of steel products a year.

Myanmar's growing steel demand

Myanmar's manufacturing sector has been growing rapidly and the country has recently developed three major special economic zones to cater for the need of this sector; namely Dawei Special Economic Zone, Thilawa Special Economic Zone and Kyauk Phyu Special Economic Zone.

Steel demand in Myanmar comes mainly from the expanding construction sector. Myanmar's economic development is expected to drive more infrastructure and construction projects in the short-to-medium term. Steel consumption per capita in Myanmar has increased from 11.4 kg in 2000 to 21.9 kg in 2011. According to POSRI, Myanmar's steel demand per capita is expected to reach 58.7 kg in 2020 and 83.8 kg in 2025. This is based on the expectation that Myanmar's steel demand will continue to expand at an average growth rate of 8% per annum. This means steel demand in the country could exceed 3 million tonnes in 2020 and reach 5 million tonnes in 2025.

The bulk of the steel demand in Myanmar's construction sector is for rebars, which accounts for 60% of total, followed by galvanized sheet and color coated sheet (30%) and hot rolled plates and sheet (10%). However, steel production capacity within the country is still low and expanding slowly. Total production capacity is less than a million tonnes a year, with around 400,000 tonnes per year capacity of billet production and around 500,000-600,000 tonnes of long steel rolling capacity. Meanwhile, coated sheet capacity is around 300,000-500,000 tonnes per year. As a result, Myanmar still has to rely heavily on steel import to fulfill its growing demand.