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)