Posted on 25 May 2015
Manufacturers of steel pipes have objected to the government's plan to increase a tax on steel imports, arguing the move would drive up prices, rendering their products less competitive in the global market.
"Buyers will surely compare our products with foreign products to find the most competitive price," Mas Wigrantoro, chef executive officer of steel pipe producer Bakrie Pipe Industries, said last week.
Indonesian manufacturers import a portion of their raw materials as local suppliers are unable to meet their specification requirements, Wigrantoro said. The high cost of obtaining the materials — added to production and energy costs, as well as increasing wages — made locally made steel pipes more expensive than imports.
"We are in an unfavorable position. One thing that needs to be addressed is how domestic industries can be more efficient," Wigrantoro said.
The government is planning to increase the import tax tariff for steel from Most Favored Nations (MFN) to 15 percent from the current rate of between 0 percent and 5 percent.
Indonesia Iron and Steel Industry Association (IISIA) urged the government to immediately implement an import tax increase to protect local steel makers.
