Posted on 03 Sep 2015
“Steel imports contribute to 5.66 percent of total non-oil and gas import nationally. The pick-up in investment from the steel industry can hopefully decrease steel imports in the future,” Franky Sibarani, chief of the Investment Coordinating Board (BKPM), said in a statement on Tuesday.
“With the 54 ongoing steel [factory] constructions that BKPM is monitoring, the steel industry could cut back imports by about $343. 2 million for next year’s demand,” he added.
Indonesia imported $3.44 billion worth of steel between January and June this year, down 21 percent from the same period last year at $4.36 billion, as the domestic economy cooled down. In comparison, exports of steel rose 42 percent to $657.7 million.
Imports of non-oil and gas products fell 11 percent to $60.8 billion in the January-June period, from $68 billion in the same period last year, according to data from the Central Statistics Agency (BPS).
According to data from the BKPM, there are currently 157 projects in the steel manufacturing industry that are underway, a total investment of some Rp 6.6 trillion ($469 million).
“In the past week alone, I have attended two events [relating to] investment in the steel sector, including the partnership between [China Steel] Taiwan and Artha Metal Sinergi today,” he said, referring to China Steel's agreement with a local steel maker to establish a $300 million plant in Indonesia.
“In my opinion, this is a positive signal for the development of the steel industry in Indonesia, because the construction will generally take two to three years.”
The BKPM has been working to facilitate more investment in the import-substitute sector, such as steel and petrochemicals, in hopes of strengthening the country’s value-added industry and decreasing a dependency on imported goods.
Indonesia booked a $1.33 billion trade surplus in July as imports fell faster than exports amid the nation’s weakest growth pace in six years and a depreciated local currency.
