Thai steel manufacturers G Steel and GJ Steel are seeking investment incentives from the Board of Investment (BoI) to support a 4.5 billion baht initiative aimed at addressing significant challenges in the local steel market while simultaneously reducing carbon dioxide emissions.
Somsak Leeswadtrakul, the founder and honorary chairman of G Steel and GJ Steel, informed the Bangkok Post that both companies are operating at low production capacity despite having over 1,000 employees. He attributed this low capacity to the influx of low-quality, inexpensive foreign steel into the Thai market.
Mr. Somsak stated that if the government takes action against the dumping issue, the two companies have advanced steel plants equipped with state-of-the-art machinery that would enable them to expand their production capacity and significantly reduce the amount of imported steel.
The BoI reports that the new manufacturing development plan for the two companies, expected to span three years, aims to improve production processes for hot-rolled sheets.
G Steel plans to upgrade production technology at its Rayong plant with a budget of 3 billion baht, while GJ Steel will invest 1.5 billion baht to enhance machinery at its Chon Buri factory.
The companies will also focus on better managing raw materials derived from recycled steel to support their production.
“This initiative will contribute to the country’s circular economic development and align with the government’s goal of achieving carbon neutrality,” said Narit Therdsteerasukdi, secretary-general of the BoI.
Both G Steel and GJ Steel are experienced in eco-friendly steel production, being the only companies in Thailand that have implemented electric arc furnace (EAF) technology, which significantly reduces carbon dioxide emissions.
EAF technology enables steel manufacturers to remelt scrap for reuse.
G Steel and GJ Steel are also recognized as the largest steel recycling firms in the country.
As subsidiaries of Japan’s Nippon Steel Corporation, the fourth-largest steelmaker globally, G Steel and GJ Steel have the potential to enhance the efficiency and quality of their operations to become leading steel producers in Southeast Asia, according to Mr. Somsak.
“It is advantageous for both companies to partner with Nippon Steel; however, the issue of low-quality steel being dumped into the Thai market must be effectively addressed,” he emphasized.
“We hope the government takes this matter seriously, as the steel industry is a vital foundation for our country’s industrial sector. It has the capacity to replace imports and save the nation hundreds of billions of baht in foreign exchange annually.”
Having established its presence in Thailand nearly 60 years ago, Nippon Steel currently operates over 30 subsidiaries and employs 8,000 people. In 2022, it decided to invest 40 billion baht in G Steel and GJ Steel to reinforce its position in the local steel market, which consists of 180 manufacturers.
“G Steel and GJ Steel are poised to elevate steel production in Thailand, paving the way for low-carbon manufacturing, which is essential for international trade, especially with the European Union,” Mr. Narit noted.
According to the BoI, Thailand has the highest per capita steel consumption in ASEAN, averaging 234 kilograms per person annually.
Approximately 60% of steel products are used for construction, followed by automotive parts (20%), electrical appliances and electronics (7%), machinery (5%), packaging (5%), and others (3%).
