Domestic Steel Expected to Enhance Local Content

High-tensile-steel-platesJAKARTA— The state-owned PT Krakatau Steel is expected to lift the local content of car products manufactured in Indonesia. Director General of Metal, Machinery, Transportation Equipment and Electronics (ILMATE) Ministry of Industry Mr I Gusti Putu Suryawirawan said the domestic steel production can ease the burden of a car manufacturer. This is mainly meant to ease their dependence on imported steel.

In 2017 there is a plan of PT Krakatau Nippon Steel Sumikin (KNNS) to start operations. The company is committed to producing special steel for car industries. This availability will also be supported by supply from the joint venture of Osaka Krakatau Steel (KOS).

Krakatau Steel has started the construction of a steel plant facility for automotive raw materials in Cilegon (Banten Province). This construction is supported with USD 460 million investment. The plant has production capacity of 1.5 million tonnes of hot rolled coils per year. It will increase production capacity from 2.4 million to 3.9 million tons per year.

Vice President Director of PT Toyota Motor Manufacturing Indonesia (TMMIN) Mr Warih Andang Tjahjono said the main problem at the moment lies in the upstream industry. This, among others, includes steel, rubber, and plastic for car manufacture.

Although some materials can already be supplied from local production, its utilisation for car components have not been able to reach 100 percent. It took five years for a number of car models such as the Toyota Agya Indonesia- production, Daihatsu Ayla, Honda Brio Satya, Suzuki Wagon-R, Datsun Go Panca to reach the close-to-100-percent achievement of local content with solely absorbing material supplied from domestic products. (*)