Citra Group moves into the iron smelting

JAKARTA (JP): The Citra Group, controlled by President Soeharto's eldest daughter, Siti Hardiyanti Rukmana, has moved into the pig iron industry through its subsidiary PT Citra Industri Logam Mesin Persada.

Siti Hardiyanti said that her group's entrance into the pig iron industry is aimed at strengthening the competitiveness of Indonesia's industries in the world market and reducing the country's dependence on imports.

Bambang Soeroso, president of Citra Industri Logam, said that the company's US$33.7 million iron smelting plant in Cilegon, West Java, which is scheduled to come on stream next October, will save US$26 million per annum which would otherwise be spent on pig iron imports.

The plant, construction of which began last month, will have an annual production capacity of between 75,000 tons and 85,000 tons of pig iron.

Bambang said Indonesia currently consumes some 300,000 tons of pig iron annually, most of which is imported.

Pig iron is used as raw material in the steel industry and for the production of automotive components, such as engine cylinders, engine blocks and cogwheels.

The company is 82 percent owned by PT Citra Lamtoro Gung Persada, 10 percent by the Tiara Indonesia Foundation and 7.5 percent by the pension fund of state-owned PT Krakatau Steel.

Bambang gave assurances that his company will not seek government protection against imports.

He said he is confident that his company's products will be able to compete, in terms of both quality and price, with imported pig iron on the local market.

Imported pig iron currently sells for Rp 600,000 per ton. "We are ready to sell our products at Rp 550,000 per ton, " Bambang was quoted by the Republika daily as saying yesterday. (rid)