Manufacturing in Malaysia: Bahru Stainless Starts Production

Malaysia’s economic develop plans have been progressing well the last few years. Balancing the development of an economy is a tricky business and many countries slip up along the way. Good plans and policies are needed. And then good execution. Good execution requires 1) attracting investors, 2) infrastructure, 3) skilled employees, 4) the ability to get plan implemented, 5) managing the environment, 6) urban planning…

Malaysia has several key areas targeted for development, including: education, energy, health care, computer technology, finance and banking. One area of focus in the Iskandar area in Johor (southern Malaysia). Penang and Kuala Lumpor are also growing well.

Bahru Stainless (a joint venture between Acerinox Group [67% stake] a Spanish company, Nisshin Steel [30% stake] a Japanese company, and Metal One) has started production. This is exactly the type of thing that is going to determine how well Iskandar, and Malaysia do going forward.

Photo of employees inside Bahru Stainless

Employees of Bahru Stainless, Johor, Malaysia

On the 12th December the first coil in the annealing and pickling line was successfully processed, which completes Phase I of the project. The current production capacity amounts to 240,000 Mt (megatonne) a year, out of which 182,000 Mt will be cold rolled. USD 370 million has been invested so far. This event is the culmination of a long process started in 2007, with feasibility studies.

The construction of Phase II is proceeding at a good pace. This phase, which start up is scheduled for the first quarter 2013, will increase the production capacity to 400,000 Mt/year. Likewise, it will allow Bahru Stainless to produce special steel grades and thin thicknesses, which are products with more added value. The investment of the second phase is estimated in USD 310 million, including a cold rolling mill, a cold annealing and pickling line, auxiliary lines, a laboratory, and an electric substation, which in the future will also feed the electric furnaces when they will be in operation.


The finalized project (after phase III) will be an integrated stainless steel factory with a melting capacity of 1 million Mt and a cold rolling capacity of 600,000 Mt.

The current staff totals 227 workers, 96% are Malaysian. Most of them have been trained in the factories of Acerinox Europe (Spain) and Columbus Stainless (South Africa). For the start up they also count with the support and experience of Spanish, North American and South African technicians, a true and great multinational team.

Malaysia joins the club of countries producers of Stainless steel, which will contribute to a higher economic growth and development of the region, driven by Bahru Stainless activities, which to a great extent will be aimed to export.
The work of our technicians, together with the experience accumulated in Acerinox Group and the great support being provided by the Malaysia authorities.

Announcement such as this, Newcastle opening (education), JPO opening (shopping) are showing Ishkandar’s potential being realized. The opening of LegoLand and more hospitals in 2012 will begin to really bring the spotlight onto Johor. Opening steel factories isn’t as widely commented on as opening a brand name discount mall, but they are both very important for Malaysia. It isn’t easy to win economic victories (other countries want the success and will compete).

Malaysia has been doing very well and announcements of production starting and places actually opening for business are beginning. Keeping up that momentum needs to be the focus. It is so easy to be complacent and happy with a few openings and the promises of the future (announced plans). What I have noticed is seen in those countries that are successful is they keep an attitude that we have to keep working very hard to make things work instead of an attitude of “look at how great we have done.” The announced plans for future projects can disappear quickly if you are not careful. If the focus stays on making things work and bringing in new, high paying jobs, the future looks very strong.

Related: PayPal Opens Regional Support Center in MalaysiaReal Estate Investments in Iskandar Have Promise But Risks RemainResidence Pass for Talented Expats

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