AIRLINK 191.00 Decreased By ▼ -5.65 (-2.87%)
BOP 10.15 Increased By ▲ 0.01 (0.1%)
CNERGY 6.75 Increased By ▲ 0.06 (0.9%)
FCCL 34.35 Increased By ▲ 1.33 (4.03%)
FFL 17.42 Increased By ▲ 0.77 (4.62%)
FLYNG 23.80 Increased By ▲ 1.35 (6.01%)
HUBC 126.30 Decreased By ▼ -0.99 (-0.78%)
HUMNL 13.80 Decreased By ▼ -0.10 (-0.72%)
KEL 4.75 Decreased By ▼ -0.01 (-0.21%)
KOSM 6.55 Increased By ▲ 0.18 (2.83%)
MLCF 43.35 Increased By ▲ 1.13 (2.68%)
OGDC 226.45 Increased By ▲ 13.42 (6.3%)
PACE 7.35 Increased By ▲ 0.34 (4.85%)
PAEL 41.96 Increased By ▲ 1.09 (2.67%)
PIAHCLA 17.24 Increased By ▲ 0.42 (2.5%)
PIBTL 8.45 Increased By ▲ 0.16 (1.93%)
POWER 9.05 Increased By ▲ 0.23 (2.61%)
PPL 194.30 Increased By ▲ 10.73 (5.85%)
PRL 37.50 Decreased By ▼ -0.77 (-2.01%)
PTC 24.05 Decreased By ▼ -0.02 (-0.08%)
SEARL 94.97 Decreased By ▼ -0.14 (-0.15%)
SILK 1.00 No Change ▼ 0.00 (0%)
SSGC 40.00 Decreased By ▼ -0.31 (-0.77%)
SYM 17.80 Decreased By ▼ -0.41 (-2.25%)
TELE 8.72 Decreased By ▼ -0.01 (-0.11%)
TPLP 12.46 Increased By ▲ 0.25 (2.05%)
TRG 62.74 Decreased By ▼ -1.62 (-2.52%)
WAVESAPP 10.35 Decreased By ▼ -0.09 (-0.86%)
WTL 1.73 Decreased By ▼ -0.06 (-3.35%)
YOUW 4.02 Increased By ▲ 0.02 (0.5%)
BR100 11,814 Increased By 90.4 (0.77%)
BR30 36,234 Increased By 874.6 (2.47%)
KSE100 113,247 Increased By 609 (0.54%)
KSE30 35,712 Increased By 253.6 (0.72%)

JAKARTA: Indonesian business groups want the government to hike tariffs on Chinese steel to rein in cheap imports, as the Southeast Asian country's top steel producer said its restructuring would bring large layoffs.

Thousands of workers at state-controlled Krakatau Steel  protested last week near a production facility in Cilegon on the western coast of Java, after it announced plans  for a 30% cut in its workforce of 6,264 in stages through 2020, Indonesian media said.

Apart from the job cuts, Krakatau Steel said it would sell non-core assets and spin off some units to improve its financial condition.

The industry turmoil comes despite a boom in infrastructure investment by the government in the last few years, with business groups blaming imported steel as the main factor responsible for the pressure.

"For us, the most important thing is to protect domestic industry so we don't die, by putting on high tariffs," Didi Aulia, head of construction business at Indonesia's chamber of commerce said on Thursday.

The Indonesian Iron & Steel Association (IISIA) said the bulk of imports came from China, adding that Beijing gave steel makers tax incentives to boost their competitiveness.

"Once (the steel) arrives here, it comes in without paying import tax," said Teguh Sarwono, an association official who is also the commercial director of Krakatau Wajatama, a Krakatau Steel subsidiary.

Although Indonesia's domestic industry produces 17 million tonnes of steel a year, only 57% was absorbed by the market, Sarwono told Reuters. Half the domestic demand for 20.3 million tonnes is supplied from abroad.

The quality of imports was low, but "For contractors here, what matters most is they're cheap," he said, adding that the use of such steel made buildings or infrastructure more vulnerable to the archipelago's frequent earthquakes.

Indonesia has levied anti-dumping duties on several types of steel from China and other countries, but the association accused foreign producers of altering product specifications to avoid them.

The government could penalise goods produced through unfair trade practices, said Bambang Adi Winarso, deputy coordinating minister of economic affairs, but he questioned how efficient domestic industry is.

"If there is no demand, there will be no imports," Winarso added. "But if the problem is pricing, it could be related to domestic inefficiency that makes us non-competitive."

Krakatau Steel has racked up losses each year since 2012, data from Refinitiv's Eikon shows. In the first quarter, the company reported a net loss of $62.3 million, a jump from a loss of $4.9 million in the corresponding 2018 period.

Copyright Reuters, 2019

Comments

Comments are closed.