Indonesia Speeds Up Development of 3 Steel-Industry Clusters

Indonesia is pushing forward development of a steel industry cluster in Cilegon in Banten province, Batu Licin in South Kalimantan on the Borneo Island and Morowali in Sulawesi Island, as the country is seeking to reduce reliance on imported steel, Bisnis Indonesia reported on last week.

Production ftom the three steel-production centers is expected to meet domestic demand and stem dependence on imported steel, Industry Minister Airlangga Hartarto saying as quoted by Bisnis Indonesia. The government expects production from the Cilegon steel cluster, which needs USD4 billion investment, can lift the country's steel output to 10 MnT by 2025.

The Industry Ministry has asked state-owned steel producer, PT Krakatau Steel, Posco, Nippon Steel and Osaka Steel to collaborate in a bid to develop the 10 MnT steel cluster in Banten. The steel-production center in Cilegon, when it finishes, can provide direct employment for 450,000 people and indirect employment for 375,000 others.

"The growth of the steel-based industry in Indonesia is quite good. For example, the automotive industry is forecast to produce 3 million cars by 2025, which will will 1.8 MnT of automotive steel," said Minister Hartarto. Indonesia's crude steel demand has reached 14 MnT, while the domestic steel producers can only make 8 MnT in a year.

The Industry Ministry in its long-term forecast made in 2014 and posted on its website, showed Indonesia's steel consumption will reach 29.7 MnT, while the country's steel production is forecast to be flat at around 8 MnT a year. It means there will be a gap of nearly 22 MnT to fill. Production and consumption are for scrap and sponge iron combined.