MALAYSIA – Local tinplate supplier Persaduran Timah Malaysia Bhd's (Perstima) proposal to the Malaysian government for an anti-dumping duty on tinplate imports has been met with fierce protests from the Malaysian Tin Can Manufacturers Association (MTCMA) which argues that it will raise canned food and beverage prices.
In February 2013, Perstima – which is 67% owned by Japanese shareholders - filed a petition to the International Trade and Industry Ministry to impose a 40% anti-dumping tax on tin plates imported from China and South Korea. The ministry is currently investigating the impact of the price differential on various industry stakeholders.
According to MTCMA committee member Datuk Anthony See, tinplates sold by Perstima are about 10% more expensive than imported ones from countries such as China and South Korea. Imported tinplate from most countries already has a 5% import duty, except for South Korea which has zero duty.
Should an anti-dumping duty on tinplate imports be implemented, domestic can manufacturers will have no choice but to pass the cost on to customers, he said.
"If the government proceeds to slap an anti-dumping duty on tin plate imports, we'll have no choice but to pass on the higher costs to our clients, who are mainly in the food and beverage sector," said Datuk See, who is also executive director of Kian Joo Can Factory Bhd, Malaysia’s largest can manufacturer.
"This would mean costlier biscuit tins, milk powder tins, paint cans, canned food and beverages.
"Right now, the tin plates sold by Perstima are US$100 (RM315) to US$120 a tonne, or 10% more expensive than what we can import from China and South Korea," he said.
Datuk See warned that if the extra cost of Perstima’s more expensive tinplates are passed on to customers, food and beverage companies might be forced to switch to different packaging formats, effectively hurting the can industry.
"This is bad for our business and is discouraging re-investment. Apart from a handful of big players, most of the tin can manufacturers here are small and medium enterprises," he continued.
"If the government continues to be indifferent to our plight, some of our members may move to a more investment-friendly environment in Vietnam, Thailand, Cambodia or even Singapore, where there's no tax restriction," he added.
"We urge the government to stop Perstima from bullying tin can manufacturers here. The government should reject Perstima's request for anti-dumping duties on imported tin plates," See said. "If the situation does not improve in the immediate term, we'll have no choice but to boycott Perstima. In the mid-term, we may even have to consider setting up our own tin plate factory here with a technology partner from China.”
See added, "In view of Malaysia embracing trade liberalisation within Southeast Asia and free trade agreements with many other countries, the government should facilitate healthy competition. The government must not support a move that will cause the lower income earning consumers to be unnecessarily burdened with more expensive food and drinks."