Steel Downstreaming Begins, Government Targets Import Reduction

JAKARTA – President Prabowo Subianto has officiated the groundbreaking of the National Downstreaming Project Phase 2 as part of efforts to strengthen domestic industrial resilience. This inauguration forms part of the simultaneous launch of nine strategic national projects. The downstreaming project is centred in the Pertamina RU IV Cilacap refinery area and is intended to reduce reliance on foreign markets while fortifying the national industrial structure. The first project involves the construction of a carbon steel slab production facility with a capacity of 1.5 million tonnes per year and an investment value of $200 million. Meanwhile, the second project is a stainless steel slab production facility with a capacity of 1.2 million tonnes per year and an investment of $320 million, coordinated by the Nusantara Future Investment Management Agency. This downstreaming initiative is described as a tactical step by the government in responding to global geopolitical dynamics, including the potential escalation of conflicts in the Middle East that could disrupt strategic logistics routes such as the Strait of Hormuz. In his speech, Prabowo emphasised the importance of managing natural resources for national interests. “Downstreaming is the main path to the prosperity of the people. It also involves technological innovation, efficiency, and cross-sector collaboration for economic progress and national welfare,” Prabowo stated. The two projects, executed by Krakatau Steel, integrate the latest efficient and energy-saving manufacturing technology. Additionally, the project emphasises the use of local iron ore as the primary raw material mix to improve cost efficiency and strengthen the domestic supply chain. Krakatau Steel’s President Director, Akbar Djohan, stated that synergy with strategic partners is key to strengthening the national steel industry. “This collaboration with strategic partners through the strengthening of cutting-edge technology and optimisation of local resources will bolster the resilience of the national steel industry. The utilisation of domestic raw materials is the main key to building an independent, efficient, and sustainable industry,” Akbar said in a press release on Friday (1/5/2026).