Airlangga Says Indonesia's Steel Production Capacity Has Not Reached The Target, This Is What He Said

Coordinating Minister for the Economy Airlangga Hartarto. Photo: Theresia Agatha/VOI

Coordinating Minister for the Economy Airlangga Hartarto said that the production capacity of the steel and iron industry in Indonesia has not met the target. This is because Indonesia has only been able to meet 12 million tons of production from the total consumption needed at around 16 million tons.

"Industrial consumption is close to 16 million tons, while new production is 12 million tons," said Coordinating Minister Airlangga at the IISIA Business Forum (IBF) 2023 at ICE BSD, Tangerang, Thursday, November 9.

Airlangga also boosted the steel industry manufacturers, one of which was PT Krakatau Steel to achieve this target.

"The production of Krakatau Steel is only 3 million and the target is 10 million. We only collect the second phase with Krakatau Posco," he said.

He also emphasized that there is no need to worry about the green steel or sustainable steel industry. This is because Indonesia itself has been able to process the blast furnace from coal.

"Not everyone can make blast furnace. Well, Indonesia has coal, iron ore is close to Australia, so if it is produced, Indonesia becomes the lowest cost steel manufacturing, it can even be cheaper than the northern region or China," said Airlangga.

So, he continued, Indonesia does not lack anything to be able to boost domestic steel production.

"For example Morowali, we don't lose. In addition, we have raw materials, labor, technology, markets (markets), we can export. 'Which country has like that?' Indonesia is the largest steel production," explained Airlangga.

Furthermore, said Airlangga, of course the government sees that the steel industry needs a lot of energy to replace it with green energy. That way, decarbonization is needed as soon as possible.

"This energy can be replaced with green energy through various alternatives. The steel industry that currently produces carbon is expected to decarbonize.

"The government encourages in addition to its request, it is also related to the Indonesian National Standard (SNI)," he said.

On the same occasion, President Director of PT Krakatau Steel (Persero) Tbk or KRAS Purwono Widodo said that his party would strive to achieve the national steel production target requested by the government.

"If we, right, have cooperation with Posco, we have realized 3 million tons. Now, in 2023-2024 we are finalizing for the second stage to add another 3 million tons. Right, 3.3.4, now that's what the Coordinating Minister (Airlangga) collects," he added.