President: Steel Industry is an Important Pillar of Economic Growth

Tuesday, 21-September-2021 19:00

illustration: steel factory
Image : wallpaperflare
illustration: steel factory

JAKARTA, NETRALNEWS.COM - The steel industry is a very strategic sector, as the produced steel products are needed and can be used for other industries. "It is one of the important pillars to spur Indonesia's economic growth," said Indonesian President Joko Widodo.

This statement was made by the President when giving a speech at the Inauguration of Hot Strip Mill #2 of PT Krakatau Steel (Persero) TBK (IDX:KRAS) in Cilegon City, Banten Province, on Tuesday (09/21/2021).

Earlier, the President first inspected the factory to be inaugurated. The factory, said the President, uses modern and latest technology in the steel industry.

"And there are only two in the world. The first in the United States of America, and the second is in Indonesia, at Krakatau Steel," said the President. The factory has a Hot Rolled Coil (HRC) production capacity of 1.5 million tons per year, and is the first factory in Indonesia capable of producing premium quality HRC.

On the occasion, the President also reminded that domestic demand for steel also continues to increase from year to year. "Do not allow foreign products to enter," said the President.

In the last five years, domestic demand for steel has risen by about 40 percent.

"This is triggered by the growth of infrastructure development that we continue to carry out," said the President.

Therefore, the President requested that the production from the factory be continuously increased to reach four million tons/year.

"With the operation of this factory, it will be able to meet domestic steel needs and will also reduce the number of steel imports into our country, which is currently in the second rank of Indonesian imported commodities. This can save up foreign exchange of up to IDR29 trillion per year," said the President.

Therefore, the President ordered that the quality of the products produced is not inferior to imported products, and can meet the needs of the industrial world in Indonesia.

“And I am sure that in the future it will become a commodity that can compete in regional and global markets. I entrust the Ministers to continue to support the steel and iron industry players, to support our SOEs to become more professional and continue to be profitable," said the President.

This effort was made to realize the 10 million tonne steel industry cluster in Cilegon which is targeted to be realized in 2025.

At the beginning of his remarks, President Joko Widodo said that the transformation of SOE is a must in order to become a world-class BUMN company that is more professional, competitive, and profitable. This needs to be done to provide better services to the public, create more job opportunities, and contribute more to state revenues.

The SOE transformation process that are carried out starts from restructuring in SOEs, forming holdings and sub-holdings, to the formation of strategic industrial clusters. For this reason, the President also requested that PT Krakatau Steel also continue to carry out transformation and restructuring. "Earlier, the Minister of SOEs said that Krakatau Steel is now getting healthier, its production is also getting smoother," said the President.

Meanwhile in his report, President Director of PT Krakatau Steel (Persero) Tbk Silmy Karim said that the Hot Strip Mill #2 Krakatau Steel Factory has an investment value of IDR7.5 trillion, with a factory area of ​​25 hectares and capacity of 1.5 million tons per year.

"This factory is the first factory in Indonesia that is capable of producing Hot Rolled Coil products with a thickness of 1.4 mm to 16 mm," said Silmy.

In addition, he said that the products have better quality, so that HRC HSM2 products will be prioritized to fill the automotive market share that requires the best quality steel.

"This is in line with Indonesia's plan to become one of the world's centers for electric car products. This will have an impact on saving Indonesia's foreign exchange and improving the trade balance," said Silmy.

Also present at the event were the Speaker of the Indonesian House of Representatives Puan Maharani, the Ambassador of the Republic of Korea to Indonesia Park Taesung, the Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan, Minister of State Secretary Pratikno, Minister of SOEs Erick Thohir, Minister of Investment/Head of BKPM Bahlil Lahadalia, Governor of Banten Wahidin Halim, and Cilegon Mayor Helldy Agustian.

Reporter : turkhan
Editor : turkhan