Posted on 14 Mar 2016
According to Hidayat Triseputro, Chairman, IISIA, the infrastructure spending in the country has remained subdued during the past several years. A large number of projects have been delayed due to various reasons. Also, infrastructure investments have fallen short of targets. However, the anticipated rise in infrastructure spending could boost the demand for steel.
The Indonesia Investment Coordinating Board (BKPM) had recently stated that Taiwanese enterprises have announced their willingness to invest US$3 billion in Indonesia’s various industries including iron and steel. Accordingly, the authorities have decided to simplify the permit procedures. The committed investment is almost double the total investments made by Taiwanese enterprises in Indonesia over the past five years. Taiwan had invested $108 million in Indonesia during 2015.
Incidentally, the Indonesian government has hiked the infrastructure spending targets for the current year by almost 50% over the previous year to nearly IDR 313 trillion. In addition, many projects that had begun during 2015 and had been stalled during the course of the year are likely to restart during 2016. This could boost steel consumption in the country.
Hidayat Triseputro noted that the country’s steel demand had grown only by 8.5% in 2015. The steel demand growth was marginal at 1.6% during 2014.
Meantime, the Indonesian Industry Ministry noted that the government has implemented a floor price on steel.
