Low demand forces many steel plants to stop production<\/p>\n
JAKARTA (JP): Low demand and higher production costs have
\nforced many local steel-related companies out of business, an
\nindustry executive said yesterday.<\/p>\n
The chairman of the Federation of Indonesian Steel Industries
\n(Gapbesi), Zainal Musa, said most steel factories were now
\nproducing at less than 50 percent of their normal capacity
\nbecause most construction projects had been halted since the
\nmonetary crisis started last July.<\/p>\n
\"Some steel producers have reduced production and some
\nfactories have even stopped all their production activities,\"
\nZainal told members of the House of Representatives.<\/p>\n
The country's 12 producers of welded wire mesh under Gapbesi
\nhad stopped producing, he said.<\/p>\n
He said six producers of billet and iron concrete in Jakarta
\nand another two plants in Surabaya, East Java, had also stopped
\nproduction activities.<\/p>\n
The remaining 19 companies were currently only producing 10
\npercent to 30 percent of their production capacities, he said.<\/p>\n
Zainal said two producers of iron sheets in Medan (North
\nSumatra), and one each in Padang (West Sumatra), Palembang (South
\nSumatra) and Jakarta had also stopped operating.<\/p>\n
The remaining seven of the 12 members of the Association of
\nIron Sheets Producers in Indonesia were only utilizing 28 percent
\nof their production capacities, he said.<\/p>\n
Four out of the 11 nail and wire manufacturing factories in
\nthe country had stopped producing, while the remaining seven
\nplants were only using a maximum of 40 percent of their
\ncapacities.<\/p>\n
The 13 companies grouped in the Association of the Iron Sheet
\nTruncation in Indonesia were only utilizing 10 percent of their
\nmaximum capacity.<\/p>\n
The 15 local producers of steel pipes in the country were only
\nusing 15 percent of their production capacities.<\/p>\n
Zainal said six out of the seven producers of wire rods in the
\ncountry were running at between 20 percent and 50 percent of
\ntheir capacities.<\/p>\n
Only the state-owned PT Krakatau Steel was using up to 75
\npercent of its wire rod production capacity.<\/p>\n
At yesterday's hearing, Zainal told House Commission V for
\nindustry, mining, trade, manpower, cooperatives and the
\nenvironment that the recent high increase in electricity loan
\nexpense tariffs had further depressed the steel industry.<\/p>\n
He said the industry had experienced 358 percent and 370
\npercent increases in power bills since the government raised the
\nload expense tariffs in May.<\/p>\n
Gapbesi urged the government and state-owned electricity
\ngenerator PT Perusahaan Listrik Negara (PLN) to cut the load
\nexpense tariff rise to a maximum of 37 percent.<\/p>\n
It demanded no more tariff rises for at least four years or
\nthe cancellation of the plan to raise the basic electricity
\ntariffs.<\/p>\n
The association also asked PLN to let the troubled factories
\ndelay their payments of the May power bills. (das)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/low-demand-forces-many-steel-plants-to-stop-production-1447893297",
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