Bakrie unit blames Japanese for debt default

Bakrie unit blames Japanese for debt default

JAKARTA (JP): Steelmaker PT South East Asia Pipe Industries
(SEAPI), a unit of the Bakrie group, said on Tuesday it had
defaulted on a total of US$100 million in debts to foreign
creditors due to poor sales performance amid unfair competition
from Japanese steelmakers.

Company president and chief executive officer Abas F.
Soeriawidjaja said the dumping practices of the Japanese steel
pipe makers in the domestic market had set back the company and
other local steel pipe makers.

"The flood of steel pipes imported from Japan into the country
has directly or indirectly created hardships for SEAPI," Abas
said in a statement.

Based in Lampung, SEAPI produces longitudinal double submerged
arc-welded steel pipe.

Abas said Indonesia's trade attache in Tokyo had provided him
with a price list of steel pipe sold in Japan which proved
Japanese steel pipe makers sold their products here at lower
prices.

"They sell their products in their home country at a price
twice higher than the one in export markets," Abas said, citing
the CNF price (price including freight cost) in Indonesia of
Japanese-made steel pipe at $539 per ton.

Abas called on the government to protect the local steel
industry against the unfair competition -- allegedly launched not
only by Japan, but also by South Korea and China -- by applying
an antidumping fee on steel pipe imports from those countries.

He said he had sent a letter to the Indonesian Antidumping
Committee calling on it to immediately impose temporary
antidumping duties on the steel pipe.

"If the antidumping fee is not imposed, the national steel
industry will go bankrupt," he warned.

The Association of Indonesian Steel Pipe Manufacturers
(Gapipa) has also voiced concern over alleged dumping practices
by steel pipemakers from Japan, South Korea and China, saying the
unfair business practices had pushed the country's steel industry
to the brink of bankruptcy.

The association's chairman, Warasdimulya, said steel makers
from the three countries had dominated the domestic market with
their low-priced products, forcing local steel pipe manufacturers
to lay off workers and cut production to 200,000 tons per year
from 1.5 million tons in the past.

"Gapipa does not ask for facilities... What we want the
government to do is create fair business competition. Dumping is
unfair, it's no good. The government should apply antidumping
rules to protect the country's steel industry," Warasdimulya said
in a statement.

"Even the United States protects its steel industry. Why don't
we?" he added. (jsk)