KUALA TERENGGANU: After operating 32 years as a strategic industry, Perwaja Steel Sdn Bhd (PSSB) will cease operations and lay off all its 1,500 employees by the end of this month, the state assembly was told yesterday.
Attempts to save the company from receivership had failed and it cost the government billions of ringgit as losses piled up.
State exco member for Industry and Commerce, Tengku Putera Tengku Awang, said: “The company had done some good for the nation.
“It supplied materials to the country’s heavy industries, and it has developed a pool of experienced employees.”
Winding up the debate on the state’s budget for next year, he said the government was concerned about the future of the 1,500 workers, who had been loyal to the company.
“I hope they are mentally prepared for the termination of their service.
“We hope that the new Eastern Steel Sdn Bhd factory in Telok Kalong, which is 80 per cent complete, will absorb some, if not all of the highly trained Perwaja Steel employees.”
Eastern Steel is a joint venture company between Hiap Teck Venture Bhd (HTVB) and Shougang Group of China, and has been set up with an investment of RM1.8 billion.
It is expected to be operational before the end of next year and will require at least 2,000 employees. The plant has the capacity to produce 1.5 million tonnes of steel.
For the financial year ending Dec 31 last year, Perwaja Steel had posted a net loss of RM420.9 million, compared with RM232.25 million in the same period a year earlier, driven by zero production and low-sale volume.
Meanwhile, Menteri Besar Datuk Ahmad Razif Abdul Rahman said investigations by the state Land and Mines office showed that CAA Resources and Red Sun did not have any dealings with the state government.
“There is no record that shows the government had approved any mining licence in Bukit Besi, or anywhere in Terengganu to CAA Resources and neither were they sub-contractors or operators for any company here,” he said in his winding-up speech.
He said investigations showed that CAA Resources had signed two memorandums of understanding with two companies in Kelantan for iron ore mining rights in Kemahang, covering an area of 2,000ha and with a company, Sri Jedok Mining Sdn Bhd.