President Jokowi inaugurates Krakatau Steel's Hot Strip Mill 2 factory

President Jokowi inaugurates Krakatau Steel's Hot Strip Mill 2 factory

A screenshot of President Joko Widodo inaugurating the Hot Strip Mill 2 factory of PT Krakatau Steel (Persero) Tbk in Cilegon, Banten on Tuesday (September 21, 2021). (ANTARA/Desca Lidya Natalia/ak)

Jakarta (ANTARA) - President Joko Widodo (Jokowi) on Tuesday inaugurated the Hot Strip Mill 2 factory owned by PT Krakatau Steel (Tbk), which is expected to produce quality steel products and help bring down steel imports.

"Today, we will witness the inauguration of the Hot Strip Mill 2 of PT Krakatau Steel, which uses modern and latest technology in the steel industry," the President said at the inauguration ceremony, which took place in Cilegon, Banten.

The inauguration was also attended by House Speaker Puan Maharani, Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Panjaitan, State-Owned Enterprises Minister Erick Thohir, Investment Minister Bahlil Lahadalia, State Secretariat Minister Pratikno, Banten Governor Wahidin Halim, Korean Ambassador to Indonesia, Park Tae Sung, President Director of PT Krakatau Steel Tbk Silmy Karim, and other officials.

"There are only two (such factories) in the world: the first in the United States and the second in Indonesia, namely Krakatau Steel. I have looked into the production process and it is really high technology," President Jokowi remarked.

He said the factory has the capacity to produce 1.5 million tons of Hot Rolled Coil (HRC) per year.

"This is the first factory in Indonesia capable of producing premium quality HRC, we will continue to increase its production to reach 4 million tons per year," he added.

With the Hot Strip Mill 2 factory starting operations, it is hoped that domestic steel needs would be met without imports, he said.

"So, we will not carry out imports, so that once again it will suppress our country's steel imports, which are currently ranked second for Indonesia's imported commodities, so we hope to save foreign exchange of Rp29 trillion per year—this is a very large number," he remarked.

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President Jokowi also said that the quality of steel produced by the factory would not be inferior to that of imported products.

"In order to meet the needs of the industrial world in our country, I believe it will become a commodity that is able to compete with regional and global commodities," he added.

The President also asked ministers to continue to support steel and iron industry players.

"(Ministers must continue) Supporting our SOEs to become professional and profitable in realizing the 10 million tons of steel cluster in Cilegon, which is targeted to be realized by 2025," he said.

The Hot Strip Mill 2 factory was built at an investment of US$521 million, or equivalent to Rp7.5 trillion. A consortium of the German SMS Group and PT Krakatau Engineering began construction work on the factory in 2016.

One type of product that the new factory will produce is HRC for automotive needs, officials said. The factory is capable of producing HRC ranging 1.4-16 mm in thickness and 600-1,650 mm in width, they informed.

Through the HSM 2 factory, the production capacity of HRC Krakatau Steel is predicted to increase to 3.9 million tons per year, which is expected to reduce HRC imports, which have reached 0.9-1.9 million tons per year, while the national demand for HRC/plate has reached 4.8-5.3 million tons per year, officials said.

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