On behalf of the Board of Directors, I am pleased to present the Annual Report of Melewar Industrial Group Berhad and its group of companies ("the Group") for the financial year ended 30 June 2023 ("FY2023").


The Group's principal activity is in the steel industry, focusing mainly on the manufacturing of Cold Rolled Coil ("CRC") steel sheets and Steel Tubes and Pipes ("Steel Tubes") through its 74.13% interest in its public listed subsidiary, Mycron Steel Berhad ("Mycron"). The other businesses of the Group are conducted through its two 100% owned subsidiaries, namely:
  • Ausgard Quick Assembly Systems Sdn Bhd ("AQAS") which specialises in delivering and building commercial and residential structures, catering to niche property markets with the use of the Industrialised Building System (IBS), and
  • 3Bumi Sdn Bhd ("3Bumi"), which is involved in food product trading and distribution.

For the twelve months to 30 June 2023, Group revenue declined by 26.9% to RM549.7 million from the RM752.2 million reported in FY2022, driven by the downward trend in global steel prices, as well as lower steel throughput volume, due to weaker demand, and the dumping of steel into Malaysia, by fellow Asian net-steel producers.

As a result of the significantly lower revenue and profit contributions from the Steel Division operations, the Group turned in a Loss Before Tax ("LBT") of RM18.5 million, in contrast with a Profit Before Tax ("PBT") of RM60.9 million in FY2022. The year saw a write-down of steel inventories amounting to RM11.0 million, an increase from the RM10.0 million write-down in the prior year, primarily attributed to the sustained decrease in raw steel prices.

FY2023 closed with Group shareholders' equity of RM409.6 million, representing a net asset value per share of RM1.14 as of 30 June 2023.


Mycron's business encompasses the combined operations of two main subsidiaries, namely Mycron Steel CRC Sdn Bhd ("MCRC") and Melewar Steel Tube Sdn Bhd ("MST").

MCRC is involved in the mid-stream sector of the steel industry, converting Hot Rolled Coil ("HRC") steel sheets into thinner gauge CRC steel sheets. MST is involved in the down-stream sector, in the manufacture of Steel Tubes, which are made from HRC or CRC.


In the first quarter of FY2023, the Group's steel division faced challenges amid reduced steel demand and a decline in global steel prices. The division's performance remained stagnant, generating a revenue of RM120.1 million. Persistent issues such as chronic manpower shortages and disrupted supply chains significantly impacted steel consumption, leading to a sharp decline in output across key steel-consuming industries.

The ongoing Russian-Ukrainian conflict further intensified global economic challenges, resulting in soaring energy costs. The adverse effects of rising energy prices and excessive inflation rendered the global economy and steel demand susceptible. Consequently, steel prices plummeted faster than raw material costs, causing a contraction in profit margins.

The second quarter witnessed the Steel Division's negative performance, marked by a revenue of RM134.2 million and a LBT of RM16.4 million. Factors contributing to this included weak domestic steel demand, increased dumping of CRC steel imports into Malaysia, and continuous downward pressure on global steel prices. The quarter marked the end of nine consecutive profitable quarters.

In the third quarter, the Steel Division's revenue declined to RM126.6 million owing to lower unit selling prices. The division recorded a marginal pre-tax profit of RM0.15 million due to lower price spreads and higher unit production cost, caused by lower throughput volume.

The fourth quarter enjoyed an uptick in revenue to RM159.1 million, 26% higher than the previous quarter, driven by increased sales volume. While contributing to a stronger gross profit performance, the quarter's overall performance narrowed to a LBT of RM0.5 million, attributed to a RM6.8 million year-end impairment charge on property, plant, and equipment.

The Food Division, under 3Bumi, continues to represent a comparatively minor unit of the Group's overall activities.

Due to reduced consumer demand caused by increased food price inflation and reduced expenditure on premium imported food items, the division's revenue contracted by 16.2% to RM7.0 million from RM8.4 million in FY2022. The division reported a LBT of RM5.6 million, compared to a loss of RM3.6 million incurred in the previous year.


The Group recognises the significance of conducting operations in a sustainable manner and are actively striving to achieve sustainability objectives and targets aligned with global reporting standards. Our commitment is to integrate sustainable practices across various aspects of our operations, encompassing Governance, Climate Change, the Environment, our People, and the Community. Since embarking on our sustainability journey, the Group has accomplished noteworthy milestones, detailed further in the Sustainability Statement of this Report.


The uncertain global economy is anticipated to linger for the next financial year. The drawn-out geopolitical conflict in the West and tension in the East continue to cast a long shadow on the world economy, which could intensify with more restrictions on trade and cross-border movements of capital, as well as contribute to additional volatility, in global commodity prices. On top of that, China's underperforming economic recovery, higher expected inflation, and elevated interest rates, will constrain any room for discretionary spending, raise the risk of debt distress, and dampen global economic activity.

The Group ended the current financial year in a loss position with steep contraction in sales volume, especially for steel related products, mirroring the weak performance of the nation's manufacturing sector, as reflected in its Purchasing-Managers-Index's ten straight months of contraction. Similar contraction is seen in major exporting nations as global trade shrank.

With the regularisation of various Malaysian infrastructural projects, such as the National Energy Transition Roadmap, and remnants of the 12th Malaysia Plan, there is hopeful anticipation, that these initiatives, will favourably impact, the domestic steel industry in the coming year.

For the domestic food industry has experienced increased operational costs, and a weakened Malaysian currency, which has resulted in imported food inflation. To enhance competitive advantage, the Food Division is working assiduously to further sharpen, simplify, and streamline operating processes, and will focus on securing more customers, broadening product array and value-added services, whilst vigilantly observing evolving consumer trends and shifting market conditions.

In summary, the Group's prospects outlook for the next financial year remains cautious, with the possibility of tepid rebound in the second half of the next financial year, in line with the World Trade Organisation and World Bank’s projection, for the regional steel and food industry.


The Board of Directors of the Group recognises that corporate governance principles, are the foundation upon which stakeholder confidence is built. In addition, we acknowledge the importance of conducting business with integrity, and in accordance with generally accepted corporate governance principles.

Our board members and senior executives will continue to focus on upholding the highest standards of corporate governance and business ethics in the operations of the Group. The Governance model for the Group includes, among others, the Board Charter, Terms of Reference of Board Committees, Anti-Fraud/ Anti-Corruption Policy, Fit and Proper Policy, Communication Policy, Conflict of Interest Policy, and Corporate Disclosure Policies and Procedures.


On behalf of the Board, I would like to express my deep appreciation to everyone in the Group for their unwavering passion, dedication, effort, and determination over the past year. I wish them every success in the year ahead.

I would also like to extend my wholehearted appreciation to my fellow Board members for their strong commitment and invaluable counsel.

To our valued business associates, customers, suppliers, and shareholders; thank you all for your continued support.

Executive Chairman