Steel And Iron Industry Is The Key To Economic Growth

Coordinating Minister for the Economy Airlangga Hartarto (Photo: dock. Antara)

JAKARTA - The government said that despite being faced with global uncertainty that was blocking various sectors, the national economy was still able to show impressive achievements with growth in the 3-2023 quarter reaching 4.94 percent (yoy).

One of the solid economic conditions is supported by excellent performance from the basic metal industry sector, including iron and steel which recorded growth of 10.86 percent (yoy) in the third quarter of 2023.

In the last five years, the average consumption of the national steel industry until 2022 is 15.62 million tons/year and production with an average value of 12.46 million tons/year. Meanwhile, in terms of exports, the iron and steel industry also continues to experience an increase trend from 7.9 billion US dollars in 2019 to 28.5 billion US dollars in 2022.

"We have a large domestic market, this is a luxury. We have raw materials, have labor, have technology, have markets, and can export, we want to ask which countries have this kind of wealth. Indonesia is also the largest steel production, definitely in ASEAN," said Coordinating Minister for the Economy Airlangga Hartarto, Thursday 9 November.

In addition, the global steel industry itself is an industry with a significant excess of capacity so that it can have an impact on export destination countries. For this reason, the Government also continues to strive to maintain the development and climate achievements of the domestic iron and steel industry so that it can continue to compete.

Airlangga explained that investment to substitute imports of iron and steel products needs to be encouraged continuously. This investment is by applying sustainable principles to support the achievement of decarbonization.

This is because the iron and steel industry has high energy consumption, resulting in high carbon emissions. For this reason, the Government continues to provide support for iron and steel industry business players who apply sustainable principles.

In addition to this support, the Government has also made a number of other efforts to encourage the growth of the national steel industry through P3DN which is applied to various sectors ranging from automotive, energy, infrastructure and PSN, mandatory SNI policies, substitution policies for imports of steel products, as well as import control based on evaluation of the ability of domestic producers by compiling a Commodity Balance.

Furthermore, the Government is also trying to increase the competitiveness of the national steel industry through the policy of Certain Natural Gas Prices (HGBT) in order to compete in the global market.

Airlangga added that in order to encourage investment by implementing various investment incentives such as tax holidays and tax allowances, encouraging the use of renewable energy, and supervising the goods in circulation to comply with specifications and conditions.

"I hope that with this existing exhibition, our steel industry can continue to be stronger," concluded Airlangga.