ACERINOX'S US$1.6 BLN STEEL PLANT BOOSTS LOCAL ECONOMY

JOHOR BAHARU (Malaysia), March 16 (Bernama) -- The construction of a US$1.6
billion fully integrated stainless steel plant in Tanjung Langsat, Pasir Gudang
here will directly benefit the local economy, said Chief Minister Abdul
Ghani Othman here Monday.

He said, 20 percent of the US$1.6 billion investment in the plant will
eventually go into the local economy through Malaysian contractors, consultants
and suppliers hired to get the project off the ground.

"We welcome this policy of local participation because it will have far
reaching multiplier effects on the local economy," he said at the ground
breaking ceremony of Bahru Stainless Sdn Bhd's plant at Pasir Gudang, Monday.

Bahru Stainless Sdn Bhd is a joint venture company between Spain's Acerinox
SA, the largest stainless steel producer in the world and its partner, Nisshin
Steel from Japan.

The US$1.6 billion investment by Acerinox and Nisshin on the stainless steel
plant in Tanjung Langsat is the single largest Foreign Direct Investment (FDI)in
Johor.

"This project by the joint venture company, Bahru Stainless is yet
another testimony of Johor's growing reputation as a world class destination
for capital intensive, high technology industries," he said.

When fully developed, it has the potential to provide 1,600 jobs and
generate a multitude of spin-off activities for the local economy which will be
of considerable value to Johor.

The plant, sited at a 140-hectare piece of land in Tanjung Langsat, will be
an integrated modern factory producing one million tonnes of stainless steel a
year.

The plant also has the potential of producing 600,000 tonnes of cold rolled
steel sheets a year when it reaches peak capacity.

Approximately 30 percent of the plant's output will be for
Malaysian consumption which means tremendous savings for the local industries
dependent on stainless steel imports.

Meanwhile, Acerinox's chairman Rafael Naranjo in his speech said, US$320
million will be invested during the first phase of the plant's construction.

The main equipment has already been ordered and civil works will start soon,
he said.

"From this year, we will start supplying finished material and at the end of
next year, cold rolled products will begin to be produced on this site.

"Likewise, from the end of next year Bahru Stainless will increasingly and
significantly contribute to increase the exports from Malaysia to the world," he
said.

Naranjo also said, Acerinox through its investment in its plant in Tanjung
Langsat, the first for the company in Asia, will try to enhance its development
and expansion into the future.

"Please be sure, that we have come to stay and remain in this beautiful
country," he said.

-- BERNAMA