The Invasion Of Imports From China To Indonesian-made Steel Is Bad, Krakatau Steel's Boss Responds Casually: Our Products Are Used In Europe

Illustration. (Photo: Doc. Krakatau Steel)

JAKARTA - Steel products made in Indonesia are considered of poor quality. In fact, when compared to imported products, the quality is much different.

As is known, imported steel still overshadows national steel products. Moreover, some time ago the domestic market was attacked by imported steel from China.

Responding to this, Krakatau Steel's President Director, Silmy Karim, said that Krakatau Steel's success in exporting steel to Europe is enough to prove the quality of steel made in Indonesia.

"It's easy. KS products are used in Europe. Europe has high standards. We as Indonesians are proud of our products entering Europe," he said in an interview with IDX Channel, quoted Friday, September 24.

Furthermore, Silmy said, it is impossible for Europe to allow poor quality steel products to be used in their country. Therefore, he admitted that he did not need to explain in detail the quality of Krakatau Steel's products.

"If it is said that our products are bad, is it true that the products that enter Europe are bad? It's easy, I won't say at length that our goods are good, our goods enter Europe. Well, that's proof," he said.

On the other hand, Silmy said that the quality of imported steel is also sometimes not in accordance with the Indonesian national standard (SNI). For example related to thinness. Silmy said, for downstream products, imported products have a thinness that does not comply with SNI. The price offered is also cheaper.

"Who is harmed? Consumers. Consumers know that it is cheaper but in terms of quality it is worse. This is also a way to deceive consumers. Poor consumers. We must guard it, so SNI not only protects the therapeutic industry but also protects consumers," he said.

Government promises to protect national products

Indonesia is again flooded with cheap steel from China. This problem has actually been happening since last year. In the midst of economic uncertainty due to the COVID-19 pandemic, the presence of imported steel will make the domestic steel industry unable to compete.

Minister of Trade Muhammad Lutfi promised to do everything possible to protect the national steel industry from the invasion of cheap steel from the Bamboo Curtain country. However, in ways that do not violate the provisions of the WTO.

Lutfi said, one way that the government will do is to eradicate illegal steel sales in the country. So that the continuity of the national steel industry can be guaranteed.

"If there are illegal goods, the Directorate General of PKTN (Consumer Protection and Orderly Commerce) here ensures that we will check and we will protect our industry. I guarantee that we will give the best for our national industry," he said, Friday, 29 January.

The negative impact of steel imports

President of the Confederation of Indonesian Trade Unions (KSPI) Said Iqbal said the flood of imported steel from China threatened local producers to go out of business and take steps to terminate employment (PHK) of at least 100 thousand workers.

"Imported steel, especially from China, is sold very cheaply in Indonesia. If left unchecked, the national steel industry will go bankrupt and 100 thousand employees are threatened with mass layoffs," said Iqbal.

During the COVID-19 pandemic, said Iqbal, of course the threat of mass layoffs made people suffer even more. This will also have an impact on the economy that is getting worse.

"The workforce, mostly the lower middle class, is increasingly screaming. The domino effect is extraordinary," he said.

Citing data from the Central Statistics Agency (BPS) in 2019, said Iqbal, the workforce in this sector is very large, around 100,000 people. Spread across various companies such as Krakatau Steel, Gunung Raja Paksi, Ispatindo, Master Steel, and others.

Still citing the same source, until the end of 2019 iron and steel was in the third position of non-oil and gas import commodities entering Indonesia. Its value reaches 7.63 billion US dollars or Rp. 106.8 trillion.

To avoid mass layoffs, KSPI hopes that the Ministry of Trade, in this case the Indonesian Trade Security Committee (KPPI) will continue to protect safeguards for IH section products.