Krakatau Steel ready to supply steel to shipbuilding industry

Cilegon, W Java (ANTARA News) - PT Krakatau Steel Tbk has expressed its readiness to supply steel needed by the shipbuilding industry, especially those grouped in the Association of Indonesian Shipbuilding and Offshore Industries (Iperindo).

"We are ready to support the governments priority agenda and President Joko Widodos policy to make Indonesia a maritime axis through infrastructure development efforts," the companys president director, Dadang Danusiri, stated here on Thursday.

Danusiri and Iperindo Chairman Eddy Kurniawan Logam signed a cooperation agreement to realize the governments policy.

Danusiri expressed belief that the products of PT Krakatau Steel Tbk and PT Krakatau Posco would be able to meet the specifications outlined by Iperindos members.

Kurniawan remarked that the transport ministry had placed an order to Iperindo for 180 ships, which needs to be completed in 2016 out of the 500 ships needed in the medium term and four thousand ships in the long term.

He said according to the governments demand, the ships must be built using domestic raw materials, and so, Iperindo would cooperate with Krakatau Steel and several strategic state-owned companies.

"This policy is expected to be able to revive the domestic shipbuilding industry, and in turn, boost economic growth," he emphasized.

Eddy said the governments policy was a breakthrough as ship procurement earlier relied on the imports of used ships due to an imbalanced tax policy as a result of which the shipbuilding industry did not grow well.

"Now, the government is offering tax benefits and financing facility to revive the shipbuilding industry," he affirmed.

An order has been placed for patrol, navigation, feeder, and semi-container vessels, which are expected to be handed over in 2016.

Eddy revealed that so far, up to 30 percent domestic raw materials were used by the domestic shipbuilding industry, but with the implementation of the current policy, it is expected to increase further.

He remarked that more than 90 Iperindo members will be involved in the shipbuilding program, and they have been very enthusiastic to be part of it.(*)