Indonesia’s metal and steel industry grew up positive last year, thanks to the import substitution program released by the Ministry of Industry (Kemenperin), business players have said.
According to Indonesia Importers’ Association GINSI the government efforts in suppressing the rate of steel imports on one hand while on the other hand encouraging import substitution program were quite effective. GINSI says the evidence have proved that import substitution program has increased productivity and improved competitiveness of the national industry, thus increasing the national economy.
“The current target of import substitution in the metal industry sector can be achieved with the support of effective policy instruments and supporting programs. So, it is a pity if some parties cannot optimize their business though getting various export facilities,” Erwin Taufan, GINSI Vice Chairman for Logistics and Port Affairs said.
Taufan reminded all parties, especially the state-owned companies not to look for scapegoats if they fail to make their metal and steel industry get growth and competitive.
Echoing the view, Chamber of Commerce and Industry KADIN Jakarta appreciates the policy and metal and steel industry. KADIN Jakarta Vice Chairman for Industry Rainer Prakuso Tobing underlined the import substitution program has encouraged the national metal and steel industry growth.
He said, although the challenges of COVID-19 are still not over, compared to 2020, the performance of the national industry is quite encouraging with an indication of the average Purchasing Manager Index (PMI) for 2021 showing an expansive number above 50.
This is also shown by the performance of the metal and steel industry sector which also experienced positive growth in 2021.
He revealed that currently the activities of the national steel industry sector are starting to rise again. Even in 2021, the utilization of the domestic metal industry had recovered.
Based on data from the Directorate of Metal, Machinery, Transportation Equipment and Electronics at the Ministry of Industry, the target for import substitution in the metal industry sector has been achieved.
“Even realization of import reduction in 2021 was above the target, reaching 24.98% (from the 2019 baseline), while the target of import reduction was contracted to 22%,” said Rainer.
“If we look at the data, in addition to the increase in investment and the import substitution program itself, our domestic metal and steel industry grew positive last year. That was our success story in 2021,” he said.
The Central Statistics Agency (BPS) noted that in the third quarter last year (Q3 2021), Indonesia’s metal industry with HS 72-73 grew over 9.82%. BPS also says that exports of steel products until November 2021 reached USD 19.6 billion, creating a surplus of USD 6.1 billion in steel trade, meaning that value of import steel was lower.
The Director of Metal Industry, Directorate General of Metal, Machinery, Transportation Equipment and Electronics (ILMATE) at the Ministry of Industry, Budi Susanto stated, the positive growth of the steel sector was due to control efforts carried out by the government with the concept of smart supply demand, which was implemented in favor of the national steel industry starting from upstream and downstream sectors.