National Steel Industry Staying Good, Minister of Trade Must Control Import

By : Ridwan And Aldi Firhand. A | Friday, July 27 2018 - 20:13 IWST

Metal And Steel Industry
Metal And Steel Industry

INDUSTRY.co.id - Cilegon - Commissioner of PT Krakatau Steel Tbk, Roy Maningkat, again reminded the government in this case the Ministry of Commerce immediately controlled the import of steel so that the industry in the country is not destroyed.

Roy, who was contacted in Cilegon on Thursday (26/7/2018) said that the national steel industry condition is currently experiencing a prolonged loss, then further exacerbated by surging import of upstream and downstream steel products as a result of the enactment of Regulation of the Minister of Trade No. 22 of 2018 (Permendag 22 / 2018) concerning Provisions on the Import of Iron and Steel.

"We have submitted protests, complaints and feedbacks submitted within the last seven months since the enactment of Permendag 22/2018 on February 1, 2018, both by upstream, downstream steel producers, steel associations and the union of steel industry employees on the application of Permendag 22 / 2018, but not responded by the Government, "he said.

Upstream and downstream steel producers strongly oppose the enforcement of Permendag 22/2018. Where there are changes to some existing provisions / mechanisms, among others related to the implementation of post border audit / inspection and the removal of recommendations from the Ministry of Industry.

"With the amendment to these provisions, it will directly affect the national steel industry which will become increasingly losers and even went bankrupt due to the absence of control and supervision of imported steel products into the Indonesian market, especially steel products from the People's Republic of China RRT), "he said.

Commissioner of PT Krakatau Steel (Persero) Tbk Roy Summett considers that Permendag 22/2018 does not reflect the alignment of the domestic industry. In fact, the current government is focused on improving the productivity and competitiveness of national industries.

Roy questioned the reason for the government to enforce Permendag 22/2018, while with the provision of iron and steel imports previously Permendag 82/2016 is good enough for the national steel industry.

According to Roy, the application of Permendag 22/2018 aimed at the government in order to accelerate the process of raw material importation is not appropriate applied to the steel industry. This is because raw material for the steel industry is not a mass product but very specific, where in one HS (Harmonized Commodity) number can consist of hundreds or even thousands of items covering type, size (thickness, width, length), specification, quantity items and so on, then for the steel industry needs to be reconsidered.

Currently the concern is not only felt by upstream producers but also felt by downstream producers. Based on data from BPS, there was a significant increase in the import of steel products with a total quantity of 5.8 million tons in 2017 and continued to increase sharply in 2018, where up to April 2018 the quantity of imports has reached 2 million tons.

"This increase not only occurs in upstream steel products such as Hot Rolled Coil / Plate, Cold Rolled Coil and Wire Rod, but also occurs in downstream steel products such as Coated Sheet (steel coated product) which is currently quite worrisome condition where the volume of import is very high, "he said as quoted by Antara.

Furthermore, Roy added that while other countries protect their domestic steel markets, such as those conducted by the United States, European Union and Turkey, Indonesia has even facilitated the import of iron and steel and its derivative products through the application of Permendag 22/2018.

"It is quite surprising that on one occasion, I met with Mr. President recently, I mentioned about Permendag 22/2018 which is clearly detrimental to the national steel industry, and Mr. President ensured that the policy was not his policy," Roy said.

"It means in my view that the Ministry of Commerce has been playing about this, so we, the national steel industry, are asking for the immediate revocation of Permendag 22/2018," he said.

Roy reminded that in every country, the steel industry is the backbone of the nation's economy. If a country has a policy that strongly supports its domestic steel industry, then the country's economic growth will increase as well.

"The impact will be systemic if the national steel industry goes bankrupt, including mass layoffs, accelerating de-industrialization, the growing deficit in steel trade balance, declining tax revenues, and declining interest in investment in the steel industry," Roy said.

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