Thursday, 29 May 2014


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  

No comments: