Southeast Asia's largest green steel project announced launch

In the process of sustainable industrial development in Southeast Asia, the region's largest green steel project has been officially launched. Esteel Enterprise Sabah Sdn Bhd (hereinafter referred to as "Esteel Sabah") will reshape the local steel manufacturing landscape through this project and drive the industry's shift toward low-carbon development.

I. Dignitaries Attend Launch Ceremony, Highlighting Project's Strategic Value

The launch ceremony of Esteel Sabah's Phase I project was held at the Sabah International Convention Centre in Kota Kinabalu. Malaysian Prime Minister Datuk Seri Anwar Ibrahim, Sabah Chief Minister Hajiji and other dignitaries attended the ceremony. This high-level participation fully reflects the project's strategic position in regional economic development and environmentally friendly industrial practices, demonstrating Malaysia's policy support for the green manufacturing sector.

II. Clear Three-Phase Investment Plan, Industry-Leading Production Capacity Scale

The project adopts a three-phase construction model with a total investment of 31 billion Malaysian Ringgit (approximately $7.3 billion). The Phase I project is designed with an annual production capacity of 2.5 million tons of hot-briquetted iron (HBI); Phase II and Phase III will respectively add direct reduced iron (DRI) production facilities. Upon full operation, the annual HBI production capacity will be increased to 7.5 million tons. This large-scale production layout positions Esteel Sabah as a core supplier in the Southeast Asian steel market, effectively filling the gap in the supply of high-quality reduced iron in the region.

III. Technological Path Innovation, Achieving Significant Breakthrough in Carbon Emission Reduction

The project has made key breakthroughs in technological innovation, providing technical support for green steel production. It uses natural gas instead of traditional coke as a reducing agent. This technical route is expected to reduce carbon emissions in the production process by 70%, significantly outperforming traditional industry standards. The application of natural gas as a clean fossil fuel not only optimizes the environmental performance of the manufacturing process and self-owned power plants but also establishes the project as a benchmark for green steel production technology in Southeast Asia, offering a replicable technical model for the low-carbon transformation of the regional steel industry.

IV. Multi-Dimensional Empowerment of Regional Development, Significant Economic and Social Benefits

Sabah Chief Minister Hajiji noted that this project is a milestone for Sabah's entry into the green technology track and is strategically significant for Malaysia in building a clean steel manufacturing system. During the construction and operation periods, the project will create multi-level employment opportunities covering engineering construction, technical operation and maintenance, production management, R&D and innovation, and other fields. It will also drive the development of related industries such as logistics, supporting processing, and living services, forming an industrial agglomeration effect. The project will directly improve the employment structure and residents' income levels in the Sipitang area and Sabah as a whole.

V. Project Progressing Orderly, Full Production Expected in 2027

Although Phase I, originally planned to start in the fourth quarter of 2023, was slightly delayed, key guarantees are in place and the production plan is clear. The "Letter of Intent for Fuel Supply Handover" awarded by Sabah Energy Corporation of Malaysia on January 9, 2024, has resolved the core energy supply issue, and project construction has returned to schedule. According to the plan, Phase I will be completed within 24 months, and the entire project is expected to reach full production in 2027. Upon commissioning, the project will not only meet the growing demand for low-carbon, high-strength steel in Southeast Asia's construction and automotive manufacturing industries but also serve as a demonstration model for regional industrial sustainable development.

As the project advances, the Esteel Sabah green steel base is expected to reshape the competitive landscape of the Southeast Asian steel industry and contribute regional practical experience to the global green transformation of the steel sector.

Blog Author Profile

DAWN | Pig Iron & Castings Procurement Advisor
18 years in the foundry trenches give me an edge: I know how pig iron’s chemistry impacts casting quality and can troubleshoot defects like cracks and porosity. With a 1M MT/year pig iron and 60k MT/year casting output from our in-house factory, plus 200+ verified suppliers on our platform, we offer fast price comparisons. Expect a 24-hour inquiry response—my goal? Not just closing deals, but being your go-to partner in the foundry world.

📧zbw@tiegu.net