News Room - Steel Industry

Posted on 21 Jan 2010

RI steel industries to lose Rp 3.76 trillion

Indonesian steel industries project a loss of Rp 3.76 trillion this year following the implementation of free trade under the ASEAN-China Free Trade Agreement (ACFTA), a senior official said.

 

"National steel industries are sensitive to the entry of steel imports into the country, particularly those from China. Investment in this sector could decline by 25 percent as a result of the free trade area," Director for Multifarious and Textile Machinery Metal Industry (ILMTA), I Gusti Putu Suryawirwan said here on Wednesday.

 

He said that the trade agreement was also predicted to significantly increase China`s steel exports to Indonesia. "We estimate that China`s steel exports to Indonesia will increase by 170.76 percent from its exports of the same commodity last year which stood at 554,000 tons," he said.

 

But he said that the negative impact of the ACFTA now in Indonesia had yet been felt because it had only been implemented since several days ago, namely on January 1.

 

"However, the government needs to provide protection for national steel industries. We need to make common efforts for the protection of national industries," he said.

 

Co-Chairman of the Indonesian Iron and Steel Industries Association (IISIA) Irvan Kamal Hakim said meanwhile that the government should soon prepare an anti-subsidy import duties (BMAS) mechanism in an effort to protect industries at home from China`s steel products.

 

"This mechanism should be prepared soon because China was so far believed to have been providing subsidy for their steel industries at home," he said.

 

He said that China had adopted a subsidy system in the form of a tax rebate at a rate between nine and 14 percent.

 

"We should not let it (China) tell us a lie. The government should renegotiate the BMAS," he added.