Myanmar Steel Industry getting ready to support industrialization and modernization

  • Zaw Min GNLM

Steel plays an important role in industrialization and modernization. Before bulk production of steel with Bessemer process, steel production was very expensive to produce and was used in small and expensive items like knives, swords and armour. With Bessemer process and modification of it, steel become a major source of the world’s industrial economy providing the base on which industries develop.

Romelt Shop Chimney IMG 0167 copy
Fabricating a factory chimney.  Photo: Smi

First steel frame structure in Myanmar if not Asia
The first steel structure building in Myanmar, if not Asia, was reported to be the New Court Building constructed in Yangon during the colonial period. The British Governor of Myanmar Sir Harcourt Butler laid the foundation stone for the New Court Building in March 1927. Steel frames produced by Dorman & Long Company were used to construct this building and this company also provided steel frames for the famous Sydney Harbour Bridge in Australia. During the colonial period of early 19th and 20th century, iron works and steels were produced in the west only. New Court Building was the latest heritage building to be awarded with a Blue Plaque and was now being renovated as Rosewood Yangon Hotel. This building close to 100 years old shows the durability of steel structures.
Opening of the economy and establishment of industrial zones
In the 1990s Myanmar opens up its economy to become a market economy from the centrally planned socialist economy. When industrial zones were established, new factories were built with modern steel structures. Initially, as in the colonial period, steel structures were imported. Steel structures custom made to the local requirements were fabricated by foreign steel fabricators and imported into the country. The difference between colonial period and the 1990s was production of steel. Even though Myanmar was not a steel producer, countries like Japan and China in Asia were producing steel that were competitive both in quality and price wise. As more and more industrial zones were established with factories constructed by steel, local business person saw opportunity in the steel fabrication business and a local company Southern Metal Industry (SMI) Co., Ltd. became the first local steel fabricator producing steel structures with imported steel.

No2Steel Mill Factory IMG 017 copy
Fabricating a steel structure for steel Mill. Photo: SMi

Expanding into other construction sector
More and more local steel fabrication companies entered into the market as industrial sector and construction sector booms. Office buildings, banks, car showrooms, shopping malls as well as houses were quickly constructed with steel structures in addition to factory buildings. In addition to I and H beams, local steel companies were producing box columns for high-rise buildings and bridges.

First steel structure high rise in Yangon
Another factor pointing to the emergence of steel was in the building construction sector. The under construction M Tower high-rise building situated between Hledan Centre and Asia Green Development Bank in Kamayut Township, Yangon was a milestone in Myanmar’s building construction sector. While New Court Building mentioned earlier was the first steel structure building in Myanmar at least if not in Asia as claimed, M Tower was the highest steel structure building to be constructed in Myanmar with many more to follow. This modern steel structure high rise was constructed by Mottama Holding Company with steel structures produced by Min Dhama Steel Structures Co., Ltd. which was part of Mottama Holdings. Raw materials used in the buildings were imported from China, South Korea and Japan and more than 8,000 tons of quality Japan technology steel were being used.

Fabrication of special steel structures
Another development in Myanmar steel fabrication sector was SMI’s fabrication of special steel structures for Pang Pet Steel Mill No. 1 of Heavy Industries Enterprise, Ministry of Industry. This was another forward step of Myanmar steel fabrication sector from importing steel and producing I, H beams and box columns to fabricating custom made special steel structures.

Requirement of regulations and regulatory bodies
With the stated developments in the Myanmar steel sector, there was no reason for Made-in-Myanmar steel to thrive in Myanmar market and export to foreign market. Some local steel fabricators were already doing this already. Our labour cost as well as workmanship in the steel sector is highly competitive compared to its neighbours.
As a local consultant recently pointed out in an article “The future of Myanmar’s steel industry is in the Government’s hands” (Global New Light of Myanmar 1 September 2019 issue), Myanmar to its credit plays by the rules and was not putting up tariffs while some of its competitors in the region were imaginatively putting up a wide ranging barriers to the smooth entry of our own steel into their market. Furthermore lack of regulation and oversight in Myanmar was allowing sub-quality steel products into the local market under cutting the quality based price of local players.
This is similar to smuggled low quality goods entering into the country illegally threatening the existence and survival of local producers. A free and fair trade is good for the market players as well as the consumer by providing quality products and services at competitive rates. A free and unfair or unregulated trade provide poor products and services at dirt cheap rates that are detrimental to quality producer and the consumer alike while promoting traders and producers of sub-standard products and services.

Government moving toward setting up regulations and regulatory bodies
Sensing this, our incumbent government was doing much needed reforms. Recently, at the 14th-day meeting of Second Pyithu Hluttaw’s 13th regular session held on 27 August 2019, Deputy Minister for Industry had said that at the moment under the title of state-own enterprises (SOEs), the SOEs were conducting the (multiple and conflicting) functions of policy maker, regulator, public service and economic entities.
As per international practice, SOEs were to be classified and the transition or transformation needs to be systematically implemented.
The meaning was to separate the functions so that the SOEs were not in a conflict of interest mode affecting the business sector it was in.
Earlier in the 10th-day meeting of Second Pyidaungsu Hluttaw’s seventh regular session held on 26 February 2018, Deputy Minister for Construction said the ministry was moving forward as much as possible to convert its departments into regulatory bodies instead of being SOEs.
The first to become a regulatory body was Department of Building. Starting from 1 April 2018 the Department of Rural Development will not conduct any work on its own with the union budget. However, if governments of states/regions request the ministry, the department will continue to work until 30 September 2019, and starting from 1 October 2019, it will become a regulatory body, said the Deputy Minister.
For the Department of Road and Department of Bridge to become a regulatory body, standards and specifications, rules and regulations, laws, standard operation procedures, policies and plans are being drawn up with the help of the Asian Development Bank. Once this is done, the plan is for the two departments to become a regulatory body before December 2020, explained the Deputy Minister.
The sooner these transitions and reforms were accomplished to Ministry of Construction and Ministry of Industry, the better it’ll be for Myanmar steel industry. And the sooner such transitions and reforms were accomplished in other ministries, the better it’ll be for the country, the people and the economy.

Share this post
Hot News
Hot News
23 September 2021
Start preparations to harvest short-term species of monsoon paddy
Myanmar to play Singapore in ASEAN Suzuki Cup opener
Myanmar ships over 2.2 mln tonnes of corn to international trade partners this FY
Muse border trade down by 24% as of 10 Sept
Myanmar’s bilateral trade with Germany reaches $460 mln in past ten months
16 acres of avocado cultivation completed in Naga area this year
Pansodan-Dala ferries increase service routes for convenience of passengers
Over 600 acres of coffee cultivated in Sagaing Region
Extremists arrested for explosive actions in Hline Township, Yangon Region