Monday, 31 August 2015


The Government continued to spur on use of local components for infra structure projects. The Ministry of Industry Saleh Husin stated in Jakarta on Thursday (11/6) that use of local made products were already produced at home for all sectors. Saleh reminded the urgency of using local products in infra-structure projects in Indonesia, to energize component industry at home to minimize import materials.

Minister Saleh criticized Government owned company Pertamina (Persero) who prioritized use of imported steel for their projects. He stressed that such was contrary to the Government’s policy to enhance use of domestic components. Saleh showed as an example the gas transmission project from Gresik, East Java too Semarang, Central Java. The project belonged to Pertagas, a subsidiary company of Pertamina convering a distance of 270 kilometer and undertaken by PT WIKA, Remaja Bangun Kencana and Kelsri.

Minister Salih said that BUMN should prioritize on using domestic steel as in Batam, Cilegon and Bekasi. If Indonesia was not able to produce steel then import was permissible. “As long as raw materials could be produced, at home, why import?” Saleh said;

Therefore Saleh urged, soon projects should prioritize use of local components. One of them was the 35,000 megawatt powerhouse. Domestic components could be used to the maximum. Moreover national industry was able to produce turbines, travel and transmission cables The same was with heavy equipments for infra structure.

Saleh admitted that use of domestic stall was still limited in projects financed by the Government. For that matter the Ministry of Industry would involve BPKP to audit level of local content (TKDN). He explained that he was scheming up an MoU worth BPKP on auditing of TKDN for BUMN using Government funding.

Saleh again reminded that the iron and steel company was among the prioritized industries playing an important role in the development of other industries considering that steel was the basic raw materials for other industries like marine construction, oil and gas, heavy equipments, automotives and electronics. The demand for domestic steel increased from 7.4 million tons in 2009 to become 12.7 million tons in 2014 and would constantly increase in line with national economic growth.

Therefore, the Minister said, to meet the need for domestic steel and minimize dependency on imported steel, domestic steel producers needed to step up steel by quality and quantity. This was to meet the need of infra structure development in Indonesia which was predicted to be worth Rp.5,529 trillion until 2019 and needed steel weighing 17,46 million tons.

In developing national iron and steel industry, the Ministry of Industry underscored that the Government was adopting some strategies like mandatory SNI certification, trade remedies, import tax, P3 DN and the proposal to reduce gas and electricity cost to maximize performance of national steel industry. (SS)

Business News - June 17, 2015

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