"We know that steel is one sector that has laid heavy pressure on the country's trade balance, with some US$6 billion worth of imports. This is not good for the national economy," President Director of PT KS Silmy Karim stated at the State Enterprises Ministry in Jakarta on Thursday.
Indonesia's steel industry has borne the impact of the implementation of the free trade agreement, especially with China in 2010.
"We will see which regulations can bring about an improvement in our steel industry. It is not solely about Krakatau Steel but the national steel industry. Krakatau Steel is only a part of the national steel industry," Karim pointed out.
He shared optimism on development of the country's steel industry along with growth in infrastructure that will open the space for growth in the nation’s steel consumption.
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"There is potential for growth in steel consumption. Currently, the national steel consumption growth ranges between five and seven percent," he noted.
Karim pointed to Indonesia's low steel consumption at 50 kilograms per capita yearly, as compared to South Korea that has recorded 1,100 kg per capita per year.
"Our consumption is one-sixth of that of Singapore and Malaysia," he stated.
Karim is upbeat about massive development in Indonesia driving development of the country's steel industry that will in turn contribute to the nation’s economic growth. Hence, a supportive regulation will be required for the industry.
"If we rely on imports, our trade balance will come under pressure. As a result, the rupiah will be affected. We will have to prepare a regulation, so that our steel industry can achieve self-sufficiency to reduce imports," he added. Related news: Indonesia seeks import tariff relief for steel products to China
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