KUALA LUMPUR: AmBank Group has provided a RM500 million Multi Trade Financing (MTF) facility to Eastern Steel Sdn Bhd (ESSB), a flat steel product manufacturer based in Kemaman.
This financing will support ESSB's working capital needs as it expands its production capacity from 700,000 metric tonnes to 2.7 million metric tonnes annually.
ESSB is currently expanding by constructing a hot-rolled coils (HRC) plant, building on its existing slab rolling mill.
The new plant, expected to be completed by November 2024, will cost an estimated RM1.6 billion and will be the only operational HRC facility in Malaysia once commissioned.
AmBank Group managing director, wholesale banking, Datuk Jamzidi Khalid, said the financing is aligned with the bank's commitment to fostering the growth of Malaysian businesses and advancing the domestic steel sector.
"We are proud to support ESSB's journey in establishing its position as one of Malaysia's licensed HRC producers, a venture set to enhance their earnings while also reducing Malaysia's dependency on imported HRC.
"This strategic move not only addresses the concern of overcapacity for long steel products but is also in line with the New Industrial Master Plan 2030 (NIMP 2030) launched by the Madani government in September last year, in an effort to encourage the manufacturing industries to shift towards higher value-added products," he added.
ESSB director Datuk Tee Choon Hock stated that once the company's 1450mm hot-rolling mill is up and running, it will address the existing domestic supply gap for hot-rolled coils (HRC) and transform the industry landscape.
This development will enable local businesses to reduce procurement costs and improve their competitive edge, leading to increased production.
"It will also strengthen the supply chain from upstream to downstream players in the iron and steel sectors," he said.