Steel demand may reach 40 million tons by 2020
Steel demand may reach 40 million tons by 2020
CILEGON, West Java (JP): Steel demand in Indonesia is growing
by 7.3 percent per annum and by year 2020 is likely to reach over
40 million tons per annum, Minister of Industry Tunky Ariwobowo
said yesterday.
Tunky noted that the highest demand for steel will remain
focused on rolled coil products, either hot rolled coils or cold
rolled coils, the demand of which in the year 2020 will likely
reach some 25 million tons.
Last year, the total demand for rolled coils in Indonesia
stood at 3.7 million tons, most of which was satisfied by state-
owned PT Krakatau Steel.
In addition to rolled coils, Krakatau Steel currently produces
wire rods. The company can produce 1.8 million to two million
tons of hot rolled coils, 650,000 tons of cold rolled coils and
250,000 tons of wire rods per annum.
Tunky, who used to preside at Krakatau Steel, said the company
will soon further expand its production facilities in Cilegon to
reach an annual production capacity of four million tons of
steel.
He added that the government would welcome the participation
of the private sector in the steel industry to meet the growing
demand in coming years.
Joint venture
"To reach a level of an industrialized country, Indonesia has
to develop its steel industry, in addition to the petrochemical
industry, as the two have proven to be the main determinants for
the success of industrialization in other countries," Tunky said
when inaugurating the operation of joint-venture steel company PT
BHP Steel Indonesia here yesterday.
The venture company is 65 percent owned by Broken Hill
Proprietary (BHP) Company Ltd. of Australia, 10 percent by
Krakatau Steel's pension fund Purna Sentana Baja, 10 percent by
Krakatau Industrial Estate, nine percent by Cilegon Cahaya Steel
and six percent by the central bank's pension fund Yayasan
Kesejahteraan Karyawan BI.
The company's coated steel sheeting plant in Cilegon, which
was established with an investment of US$55 million, has an
annual production capacity of 100,000 tons of metallic coating
and 25,000 tons of paint. The paint line began operating late
last year and the metallic coating operation started early this
year.
Hardy Papson, president of BHP Steel Indonesia, said the
government licensed the company with an export right of up to 10
percent of its total products. Currently, the company has
exported a small portion of its output -- some two percent -- to
India, Malaysia and Singapore.
Coated steel
Meanwhile, Ron McNeilly, an executive of BHP Ltd., said
Indonesia imported coated steel sheeting products from his
company in Australia worth some US$30 million per annum until the
operation of its coated steel factory in Indonesia.
McNeilly said BHP's coated steel factory in Indonesia is thus
far the company's largest investment in Asia. If the business is
good here, he said, the company plans to expand its coated steel
production facilities in Cilegon.
BHP Ltd. is Australia's largest company and a leading global
resource company with operations in over 50 countries worldwide
and total assets of over A$30 billion (US23 billion).
In addition to the steel business, BHP also operates in
various areas, including minerals and petroleum, power
generation, transportation and information technology. (rid)