Krakatau Steel Wants To 'Hit' Imported Steel Products From China, President Director: As Long As There Is No Unfair Trade

JAKARTA - After going through the transformation and efficiency that has been carried out since 2018, PT Krakatau Steel Tbk claims its superior steel products are increasingly competitive.

It started from 2020, Krakatau Steel's Hot Rolled (Hot Rolled Steel) products succeeded in penetrating the export market where export quality products must have high standards and quality. On March 11, 2021, Krakatau Steel exported 20.000 tonnes of HRC steel to the European continent with the destination countries Portugal, Italy, and Spain.

President Director of Krakatau Steel Silmy Karim said, with Krakatau Steel and the Group transforming to be more efficient, there have been many savings that have been made.

In 2020, Krakatau Steel will be able to reduce operating costs by up to 41 percent. Especially with the implementation of the industrial gas price of USD 6 per MMBTU which has also made production costs more efficient.

In addition to Krakatau Steel, which exports to Malaysia and Europe starting in 2020 and early 2021, a subsidiary of Krakatau Steel which is engaged in manufacturing Steel Pipe and Anti-Corrosion Coating Application Services, PT KHI Pipe Industries (PT KHI), has also successfully exported steel pipe products to Australia with a total shipment of 4.370 tons.

"PT KHI supplies steel pipes with a diameter of 1500 mm, 25 mm thick, and 50 m long. All the main raw materials for this steel pipe product use PT KS's Hot Rolled Coil (HRC)", said Silmy Karim in a written statement, Monday, March 15.

He said the production of steel pipes for this export project was a success in itself because the required specifications had a high level of difficulty both in terms of testing, dimensions, and thickness which were at the maximum limit of machine capacity owned by PT KHI and Krakatau Steel.

In addition, the existence of a series of testing stages carried out by third parties is also a challenge in itself and has been successfully carried out.

For the domestic market, Krakatau Steel's products play an important role in infrastructure development. One of them is the phenomenal project of the Jakarta-Cikampek II elevated toll road, the Light Rapid Transit project, the New Yogyakarta International Airport, and others.

Besides that, Krakatau Steel's steel pipe products are also very strategic in terms of infrastructure in the oil and gas sector. From 2019 to today, Krakatau Steel and its subsidiaries have supplied the steel needs for the API Series as much as 120.000 MT.

As for the needs of oil and gas pipelines, PT KHI's subsidiary has supplied 23.349 tons in 2019 and 36.149 tons in 2020.

"We are optimistic that we are ready to meet the demand for domestic steel because we are able to compete with imported steel products, with a record that there is no unfair trade. Even Krakatau Steel and its subsidiaries have succeeded in making export shipments to several countries. This proves that our products can be well received in global and domestic markets at competitive prices", continued Silmy.

Imported steel products, especially steel products from China, get a lot of relief from their countries to get to Indonesia. Subsidies from the Chinese government for tax rebates greatly affected the decline in steel import prices.

For this reason, according to Silmy, efforts to strengthen the domestic market need to be strengthened with a series of regulations and firm actions in the event of fraud in the steel trade.

"Krakatau Steel appreciates the government for being able to prevent the rapid flow of imported steel products entering Indonesia by up to 34 percent in 2020 so that now domestic steel products are increasingly competitive and we can improve our performance by increasing sales volume", he said.

"We also support the enthusiasm of Mr. President Joko Widodo (Jokowi) to refuse the use of imported products by jointly optimizing P3DN (Increased Use of Domestic Production) and TKDN (Domestic Component Level) for the needs of the national industry", Silmy concluded.