Ministry of Industry
(Ministry of Industry) considers that imports of boron steel or alloy steel for
infrastructure projects are very detrimental to the national steel industry.
"Currently, imports of
boron steel is free from import duty and it threatens the national
industry", said Director General of Manufacturing Industry Basis of the
Ministry of Industry, Harjanto, in the "Discussion on the Opportunities
and Challenges for the National Steel Industry" in Jakarta, on Monday
(May 5).
That is why the Ministry of
Industry and Ministry of Trade were finalizing regulations that will restrict
the entry of alloy steel whose purpose is solely because the industry wants to
enjoy lower import duty (duty-free). However, the government also observed
this rule, so that in the end, the downstream and intermediate industry can be
accommodated to get an exception to obtain boron steel as their raw materials,
he said.
The steel industry is one
of the strategic industries that play an important role in supplying raw
materials for construction sector, pipes, machinery and defense equipment or
automotive sector. "In an effort to increase investment in the country, we
will provide a special tax holiday for industries in priority sectors, such as
pellet and sponge iron industry", he said.
Meanwhile, member of the
Standardization and Certification Committee of the Indonesian Iron and Steel
Industry Association (USIA), Basso Datu Makahanap, in the same occasion, said
that the government needs to control the imports of boron steel because its
presence makes the domestic steel market to decline.
"The flood of boron
steels causes the local steel industry to face difficulty in determining the
selling price. Price of boron steel is cheaper than local steel, and it causes
a decline in demand for local steel", he said. Therefore, a permanent
solution to solve the problem of invasion of boron steel imports is by
requesting safeguard in accordance with the rules of the World Trade
Organization (WTO). "To protect local boron steel products, safeguard
instrument should be used. In addition, import manipulation practices should
be addressed immediately", he said.
Previously, Import Director
of the Directorate General of Foreign Trade at the Ministry of Trade, Sumedi
Didi, said that there will be restrictions of regulations on trading system
for imported steel containing boron, and finalization stage is still on the
way. In the near future, it is expected that the regulations will soon be
signed, because this time, both the Ministry of Trade and the Ministry of
Industry are still reviewing and discussing the mechanism for the implementation
of the regulations.
"In future, the rules
concerning trading system of boron-containing steel will be applied to importers,
whose status will be distinguished whether they are Registered Importer (IT) or
Importer Manufacturer (IP). Currently, the relevant technical ministries are
still completing a review of a number of tariff lines for this kind of steel,
associated with HS (Harmonized System) code number, whether it is worthy or not
to be included in the category of boron-containing steel, IISIA: Boron Steel
Import Value RP 439 Billion.
Based on data of IISIA, due
to illegal imports of boron steel or alloy steel for infrastructure projects of
400,000 tons every year, the state suffered a loss of Rp439 billion of three HS
(Harmonized System) codes. "There are some steel business operators who
incorporate boron steel element when doing imports to reduce costs. If
importing pure steel, the price of the product is much cheaper", Basso
added.
In 2012, imports of the
national steel industry reached 2.02 million tons with an import value of
USD13.4 million. The imports are to cover domestic consumption which still
experienced a shortage of 2.6 million tons of national production, which is
only 6 million tons. "National steel production is only 6 million tons,
while domestic demand reached 8.6 million tons. National per capita consumption
in 2012 reached 29.6 kilograms", he said.
It is projected that by
2015, steel consumption per capita to reach 49.6 kg with steel demand per year
at 13.8 million tons: Arid, by 2025 it is estimated that gross
domestic product (GDP) will range from USD 4 trillion to USD 4, 5 billion, so
that steel consumption per capita will increase up to 100 kg and national steel
demand 26.2 million tons.
"Master Plan for the
Acceleration and Expansion of Indonesian Economic Development (MP3EI) requires
large amounts of steel with a significant increase of demand. This will
encourage an increase in investment and other multiplier effects that will ultimately
drive economic growth", he said. (E)
Business New - May 9, 2014
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