Indonesia's major steel manufacturers plan to raise exports

Indonesia. Steel producers to boost exports.

Indonesia's major steel manufacturers plan to raise their exports for the next three months to compensate for decreased local demand in the period surrounding the Islamic fasting month of Ramadhan and Idul Fitri. PT Krakatau Steel marketing director Irvan K. Hakim said Wednesday the state steel maker, along with PT Essar Indonesia and privately-owned Gunung Garuda Steel Group, were raising exports this month through to October. "The domestic market slows down during the three-month period as the country is welcoming the fasting month and Idul Fitri," he told a press conference. "It's impossible for us to lower our productions during the period. Therefore, we are turning to exports." Also attending the conference were Essar president director K. B. Trivedi and Gunung Garuda commercial director Sujono. During the period, Krakatau will increase its exports from 10,000 tons per month to 20,000 tons per month; Essar from 5,000 tons to 9,000 tons; and Gunung Garuda from 35,000 tons to 40,000 tons, according to Irvan. The three companies' main export markets include Southeast Asia, the Middle East and Europe. However, exports will remain low compared to domestic sales. Krakatau annually produces two million tons of hot roll coils, 85,000 tons of cold roll coils, 450,000 tons of wire rods, 300,000 tons of steel bars and 200,000 tons of steel pipes, according to Irvan. Essar manufactures 400,000 tons of cold roll coils per year, Trivedi said, while, according to Sujono, Gunung Garuda yields 700,000 tons of hot roll coils and 500,000 tons of long steel products, including H-beams, per year. Irvan said the country's steel demand has reached 7 million tons per year, with local factories buying 60 percent, and that demand would grow by 8.4 percent each year. Although the three companies claimed the domestic market was traditionally relatively sluggish during the period, Irvan said they had received orders from numerous government projects to deliver in the holiday window. The projects include the megawatt crash program, the kerosene-to-gas conversion program and state gas distributor PT Perusahaan Gas Negara's piping project. "We promise those projects will be our top priorities because they are in the public's interest and have deadlines," said Irvan. Essar, a subsidiary of India's fourth-largest metal maker, plans to spend US$50 million in the next two years to expand its current factory in Cibitung, West Java. The expansion will boost Essar's current production to 500,000 tons per year from its current 400,000 tons, said Trivedi.