13 Februari 2008
Govt to reduce import duty on HRC to 0% CILEGON

The government will reduce the import duty on hot roll coil (HRC) to zero percent in a bid to encourage the growth of the country's downstream steel industry, a minister said.

"Import duty on HRC will be eliminated," Industry Minister Fahmi Idris said after a ceremony marking the start of construction of a factory of PT BlueScope Steel Indonesia in Cilegon, Banten, Tuesday. He said the government would lower the import duty on HRC from currently 5% to o% to increase the competitiveness of the country's steel industry.

"The higher costs in the upstream steel industry will lower the competitiveness of downstream steel products while at the same time we want to penetrate the global market," he said.

Indonesia is still dependent on imported HRC as its largest steel maker, PT Krakatau Steel (KS), cannot yet fully meet domestic demand.
"We still import a large volume of HRC to meet domestic demand," Fahmi said.

He said he did not believe the lowering of import duty on HRC to zero percent would have a negative impact on PT KS's performance because HRC was only one of its various products.

"This is dilemmatic, but we have to make a choice which one is the most strategic," he added.
During the past four years, steel imports had tended to increase following increased domestic demand.The volume of the country's steel imports is expected to reach 1.5 million tons per year and that of domestic demand for steel six million tons. (ANT)

 

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