Indonesia must have international standard steel industry

Indonesia must have international standard steel industry

President Susilo Bambang Yudhoyono. (ANTARA)

Cilegon, Banten (ANTARA News) - President Susilo Bambang Yudhoyono said Indonesia must have a steel industry which meets international standards while at the same time meeting its increasing steel demands.

"We must be able to build a world-class steel industry," he said at a meeting with boards of directors of PT Krakatau Steel Tbk. and PT Krakatau Posco here on Tuesday.

President Yudhoyono, in the company of several cabinet ministers, asked national steel industries, especially PT Krakatau Steel, to increase production and improve the quality of its products.

He also asked the company to maintain its working atmosphere and make sure relations with employees and local communities remain positive.

He said the steel industry is very important because its products spread to various sectors. He further said the industry is necessary for infrastructure development, property, defense, and other industries.

In view of that, President Yudhoyono is optimistic that the development of the steel industry in the country would support the nation`s economic growth.

The president welcomed the co-operation between PT Krakatau Steel and a South Korean company to set up a joint company, to be called PT Krakatau Posco.

He hoped Indonesia could learn from the success of South Korea to become an advanced country within only three decades.

However, President Yudhoyono also advised all steel industries in the country to prioritize national interests.

PT Krakatau Steel`s president director Fazwar Bujang, meanwhile, expressed optimism that the state-owned company would continue to progress.

He said the company`s present capacity has reached 3.15 million tons per year and he estimated the capacity could be increased to 4.52 million tons per year.

PT Krakatau Posco, meanwhile, is able to produce three million tons of steel products per year. In the next investment stage, the capacity is estimated to increase to six million tons a year.

PT Krakatau Steel and Pohang Steel and Iron Corporation (Posco) from South Korea have set up an integrated steel plant in Indonesia with an investment of around six billion US dollars.

Initially, Posco would hold 70 per cent of the shares while PT KS would have 30 per cent, but after one year PT KS`s portion will increase to 45 per cent while Posco's will decline to 55 per cent.

The investment for the project is valued at Rp38 trillion at the construction stage and Rp31 trillion during the production stage.