Indonesia's steel demand to increase: Analyst<\/p>\n
JAKARTA (JP): Indonesian demand for steel will go up by 7
\npercent annually over the next 10 years to about nine million
\ntons in 2000 and 13.5 million tons in 2008, an iron and steel
\nanalyst predicts.<\/p>\n
Southeast Asia Iron and Steel Institute assistant Bambang
\nSusatiawadi said yesterday that domestic demand would increase
\nfrom an estimated 7.3 million tons this year.<\/p>\n
\"The prospect of steel demand reflects the countries' economic
\nplans, industrial structures and industrial development
\nforecast,\" Bambang said at a conference on Indonesian steel.<\/p>\n
The projection was based on an optimistic outlook of economic
\ngrowth of about 7 percent.<\/p>\n
Economists, however, have predicted that the currency crisis,
\nwhich has eroded the rupiah's value against the U.S. dollar by
\nabout 35 percent since July, will lower the country's economic
\ngrowth to between 5 percent and 7 percent next year.<\/p>\n
Bambang said the country's steel industry would have to raise
\nits production capacity.<\/p>\n
\"The current domestic supply is far below domestic demand,\" he
\nsaid.<\/p>\n
Last year's production capacity of 3.8 million tons could only
\nmeet about 44 percent of the 6.9-million-ton demand, he said.<\/p>\n
He said development of the upstream steel industry was
\nimportant in pursuing steel industry growth and promoting a
\nstrategic economic alliance.<\/p>\n
But lack of capital and technology and insufficient
\ninfrastructure had caused very slow development of the upstream
\nsteel industry in the country, he said.<\/p>\n
The government could not provide the huge investment needed to
\nfinance the upstream steel industry, while the involvement of
\nprivate sectors was limited, he said.<\/p>\n
A strategic alliance between the government, private sectors
\nand foreign investors would contribute to the establishment of a
\nviable upstream steel industry, he said.<\/p>\n
\"In the long run, Indonesia should make plans to establish
\nseveral new integrated steel plants with a total capacity of 10
\nmillion tons a year starting 2006 to satisfy the domestic market
\nas a base to enter the global market,\" he said.<\/p>\n
The integrated plant already in operation had turned out to be
\nincapable of providing enough steel to consumers in Indonesia, he
\nsaid.<\/p>\n
Bambang said another problem facing the Indonesian steel
\nindustry was that producers had to import raw material and
\nsupporting material.<\/p>\n
Indonesia had a limited supply of iron ore and coal for the
\nupstream steel industry, he said.<\/p>\n
At the same time, Indonesia had abundant natural gas resources
\nfor energy, but gas prices tended to increase, he said. (das)<\/p>",
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