Steel product makers fear Afta influx

       Steel and stainless steel product manufacturers have called for measures to protect local businesses, at risk from the elimination of import tariffs under the Asean Free Trade Agreement (Afta)in January.
       Once the import tariff is removed,cheaper steel and stainless steel products, mostly from China, are expected to flood into the local market.
       Ekachai Youngvanich, vice-chairman of the executive committee of Satien Stainless Steel Plc and a member of the Federation of Thai Industries' steel club,said several steel and stainless steel companies had discussed the potential impact and how to tackle the problem.
       "The government should help us and protect the local industry. We're worried that independent importers will bring in low-quality kitchenware products to Thailand. The market will get more intense and consumers will not be safe using these products," he said.
       Satien Steel Kitchenware, the maker of Zebra kitchen products, aims to avoid tough competition by shifting to focus on premium products.
       But governments in many Southeast Asian countries have already implemented measures to protect their manufacturers, which makes it harder for Thai companies to export to these markets.
       For example, Malaysia has already set up the Malaysian Industrial Standards Institute to test imported Thai stainless-steel tubes.
       "We think our company will get a positive effect when exporting products to Asean. The non-trade barrier will make our price go down, so we can sell 5% to 10% more products," said Mr Ekachai.
       Purchasing power for stainless kitchenware products has improved both locally and overseas at the moment, he said. The company has had more export orders from the United States, Europe and Australia.
       The company will therefore open its new 200-million-baht production facility at its Rayong factory by the middle of next year. This will raise production capacity by 10-15% from the current 6,000 tonnes per year, and should enable the company to meet demand over the next five years.
       About 70% of production will serve the domestic market and the rest exports.
       Sales of Satien Stainless Steel last year were at 1.2 billion baht. They are expected to increase by 5-7% this year,less than last year's double-digit growth due to the downturn and the H1N1 flu outbreak. Demand for stainless-steel kitchenware from hotels and restaurants has also fallen in line with the slump in tourism.
       Mr Ekachai said demand for Satien's kitchenware will increase by 7-10% next year because of the rebound. The company aims to achieve annual sales of 1.5 billion baht within the next five years.