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Profile of steel industry in Indonesia.



Backgrounds

The country's steel industry has remained in the doldrums doldrums (dŏl`drəmz) or equatorial belt of calms, area around the earth centered slightly north of the equator between the two belts of trade winds.  for a number of factors. One of the main factors is heavy dependence on imports for basic materials. Dependence is still high on imports in both the upstream From the consumer to the provider. See downstream.

(networking) upstream - Fewer network hops away from a backbone or hub. For example, a small ISP that connects to the Internet through a larger ISP that has their own connection to the backbone is downstream from the larger
 and downstream sectors of the industry.

The only integrated steel industry in the country is the state-owned steel maker PT Krakatau Steel (KS), which has the facilities to produce sponge iron Sponge iron is the product created when iron ore is reduced to metallic iron, usually with some kind of carbon (charcoal, etc), at temperatures below the melting point of iron. , hot rolled coil (HRC HRC Human Rights Campaign
HRC Human Rights Council (UN)
HRC Human Rights Commission
HRC Hard Rock Cafe
HRC Hillary Rodham Clinton (democratic senator/presidential candidate; former first lady) 
), cold rolled coil (CRC (Cyclical Redundancy Checking) An error checking technique used to ensure the accuracy of transmitting digital data. The transmitted messages are divided into predetermined lengths which, used as dividends, are divided by a fixed divisor. ), etc.. Steel pellets, however, are still imported to produce sponge iron. In addition, PT KS has no capacity enough to produce HRC of certain types such as one with a thickness of less than 3 mm, which is used to feed CRC factories. Its HRC facility could only produce HRC with a thickness of less than

3 mm to feed its own CRC facility. Other CRC producers in the country, therefore, have to rely on imports for the basic material.

Heavy dependence on imports places the country's consumers in a weak bargaining position facing suppliers abroad. Consumers in the country are often facing the sellers' market. The sellers tend to dictate TO DICTATE. To pronounce word for word what is destined to be at the same time written by another. Merlin Rep. mot Suggestion, p. 5 00; Toull. Dr. Civ. Fr. liv. 3, t. 2, c. 5, n. 410.  the prices. When the steel prices are high, suppliers of basic material put a higher prices for their basic materials, but when the prices are low suppliers, which are mostly integrated producers, keep their basic material for their own use.

It is not rare that HRC is sold at a price almost the same as that of CRC, that CRC producers in the country could not compete well in the market. It is also often that the prices of imported steel pipes are lower than the price of HRC from which the pipes are produced. The distortion distortion, in electronics, undesired change in an electric signal waveform as it passes from the input to the output of some system or device. In an audio system, distortion results in poor reproduction of recorded or transmitted sound.  is a strategy of large producers to control the market and dictate the prices later.

The Strategic Industry Agency, when it was under B.J. Habibie as a research minister, launched development of steel industry as a strategic industry by building integrated project called second generation steel mill. Various feasibility studies have been carried out by international consultancy firms on the integrated steel factory financed by international agencies like UNIDO and JICA JICA Japan International Cooperation Agency
JICA Jimmy Carter National Historic Site (US National Park Service)
JICA Joint Intelligence Collecting Agency
 from Japan.

It was in the program that Indonesia will have an annual production capacity of 20 million tons per year of steel in 15 years after the program was launched early 1990s.A number for foreign steel makers such as POSCO POSCO Pohang Iron & Steel Co, Ltd  of South Korea, BHP BHP

blood hydrostatic pressure; the pressure exerted by the blood cells and plasma in the capillaries.
 of Australia, and companies from Germany have indicated interest in building mini mills with an annual capacity of 2 tons per year. Foreign companies have also indicated interest in producing HRC and CRC in the country.

Early 1990s, Indonesia had the largest steel industry in Southeast Asia putting Thailand and Malaysia behind. The prospect is good for integrated steel industry in the country with the large domestic market.

However, with the monetary crisis in 1997/1998, the project has been kept in the pipeline. All plans to develop second generation still mill by Krakatau steel and by private investors were cancelled or shelved.

The Texmaco Group also has plan to build integrated steel industry to produce special steel to feed machine component industry, but the company itself is now virtually bankrupt with large debt. The owner is outlawed for alleged corruption.

Only a few companies could manage to implement their projects after the crisis. The Essar Group The Essar Group is an India-based diversified corporation with interests in telecommunications, shipping, steel, construction, power and oil. The group has an estimated market value of US$ 15 billion and has an annual revenue of US$ 2.2 billion.  succeeded in expanding its CRC factory and GI sheet plant. The Gunung Garuda Group has diversified diversified (di·verˑ·s  its products from hot rolled plates to pre fabricated fab·ri·cate  
tr.v. fab·ri·cat·ed, fab·ri·cat·ing, fab·ri·cates
1. To make; create.

2. To construct by combining or assembling diverse, typically standardized parts:
 buildings including factory building and warehouses.

The steel industry was among the hardest hit by the crisis especially those producing billet and reinforcement reinforcement /re·in·force·ment/ (-in-fors´ment) in behavioral science, the presentation of a stimulus following a response that increases the frequency of subsequent responses, whether positive to desirable events, or  bar. The crisis caused heavy slump in the construction sector that demand for many steel product shrank shrank  
v.
A past tense of shrink.


shrank
Verb

a past tense of shrink

shrank shrink
. Many billet factories have been closed.

When the crisis receded PT Krakatau Steel renewed its plan to build its upstream steel industry. It planned to build thin slab flat rolling mill rolling mill: see steel. . The project has attracted investors from Italy, South Korea and other countries.

However, implementation of the project is now in big question after Vice President Jusuf Kalla Jusuf Kalla (born Watampone, South Sulawesi; May 15, 1942) is the current Vice President of Indonesia and Chairman of the Golkar Party. Early life
Jusuf Kalla was born on 15th May 1942 in Watampone, South Sulawesi.
 said the project to be built in Cilegon is not feasible as it has strong support from the availability of basic material, and guarantee in energy supply. The availability of basic materials, therefore is vital to create a strong steel industry.

Kalla, therefore, suggested development of upstream industry in South Kalimantan South Kalimantan (Indonesian: Kalimantan Selatan often abbreviated to Kalsel) is a province of Indonesia. It is one of four Indonesian provinces in Kalimantan - the Indonesian part of the island of Borneo. The provincial capital is Banjarmasin.  where large reserve of iron ore has been found and energy supply is more guaranteed than if the facility is built in Java.

The problem with South Kalimantan, however, is inadequate infrastructure hat needs large additional investment.

Implementation of the project, however, will likely remain in the pipeline for a longer time to come. The plan to build it in Cilegom has been virtually scrapped and the idea of moving it to South Kalimantan will need further mulling over. PT KS has to start calculation all over again from the beginning.

Current Issues

Since the fourth quarter of 2005, the domestic steel industry has faced marketing problem with large imports of steel products in cheaper price especially from China. China is no longer a major importer of steel products, on the contrary it has large oversupply o·ver·sup·ply  
n. pl. o·ver·sup·plies
A supply in excess of what is appropriate or required.

tr.v. o·ver·sup·plied, o·ver·sup·ply·ing, o·ver·sup·plies
 that has to be disposed of abroad. At the same time the prices of oil fuels shot up in the country resulting in a decline in the buying power Buying Power

The money an investor has available to buy securities. In a margin account, the buying power is the total cash held in the brokerage account plus maximum margin available.

Also referred to as "Excess Equity.
 of the people.

Large imports from China led to dumping allegation The assertion, claim, declaration, or statement of a party to an action, setting out what he or she expects to prove.

If the allegations in a plaintiff's complaint are insufficient to establish that the person's legal rights have been violated, the defendant can make a
. The government was urged to slap higher import duties ion steel products from China. The call for a rise in import duty was opposed by consumers of steel products from China. Krakatau Steel led the group demanding an increase in the import duties on HRC and CRC. GI Sheet producers strongly opposed the call.

The controversy over import duty on steel products has remained unsolved reflecting the failure of the government to produce a clear policy in the steel industry.

Call for harmonization har·mo·nize  
v. har·mo·nized, har·mo·niz·ing, har·mo·niz·es

v.tr.
1. To bring or come into agreement or harmony. See Synonyms at agree.

2. Music To provide harmony for (a melody).
 of import duties on upstream and downstream products is still waiting for an answer from the government.

In general strategic issued faced by the country's steel industry are :

* Tariff harmonization. The government is still confronted with a dilemma in imposing import duty on steel products. The import duties on steel products are not yet harmonized har·mo·nize  
v. har·mo·nized, har·mo·niz·ing, har·mo·niz·es

v.tr.
1. To bring or come into agreement or harmony. See Synonyms at agree.

2. Music To provide harmony for (a melody).
 between upstream and downstream products.

* Dumping allegation against China Large surplus after over expanded its steel industry China exported its steel products in cheap prices including to Indonesia resulting in marketing problem for local producers notably PT KS. PT KS, therefore filed anti dumping petition with the government against China.

* In the past 3 years Indonesia's imports of steel shot up from US$1.74 billion in 2003 to US$ 4.66 billion in 2005. Imports surged both in volume and value amid rising prices to follow growing demands mainly from the automotive and construction industries before the oil fuel price hikes in Oct. 2005. The oil fuel price hikes caused a market slump resulting in a decline in demand for steel in 2006.

* The increase in the fuel prices and electricity tariff weakened the competitiveness of the country's steel products. In addition the steel industry is no longer efficient with old machines.

* The problems faced by the steel industry results in low capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens. . Many factories operate at less than 50% of their installed capacity. Some could not even survive the difficulty and were closed.

Industrial structure

Industrial Tree

The products of steel industry from up to down streams consists of flat products and long products. Uppermost in the upstream industry is iron making from iron ore to turn out sponge iron. The following process is steel making process in which, sponge iron and scarp scarp: see escarpment.  and hot briquette bri·quette also bri·quet  
n.
A block of compressed coal dust, charcoal, or sawdust and wood chips, used for fuel and kindling.



[French, diminutive of brique, brick
 iron (HBI) are melted into steel in the form of slab as the basic material for flat product and billet as the basic material for steel bars or long product.

The next process hot rolling The metallurgical process of Hot rolling, used mainly to produce sheet metal or simple cross sections from billets describes the method of when industrial metal is passed or deformed between a set of work rolls and the temperature of the metal is generally above its , which is a process to make hot steel basic material thinner in a desired size. The hot rolling process will turn out Hot Rolled Coil and Steel Plate. HRC is make thinner again through cold rolling cold rolling
n.
The rolling of steel or other metal at room temperature to preserve its original crystal structure.
 to turn out cold rolled coil (CRC), which is used as the basic material for Galvanized Iron Noun 1. galvanized iron - iron that is coated with zinc to protect it from rust
corrugated iron - usually galvanized sheet iron or sheet steel shaped into straight parallel ridges and hollows
 Sheet (GIS (1) (Geographic Information System) An information system that deals with spatial information. Often called "mapping software," it links attributes and characteristics of an area to its geographic location. ), tin plate, etc..

Hot rolling process also turns out long product in the form of wire rod a metal rod from which wire is formed by drawing.

See also: Wire
 and reinforcement bar (concrete iron). Wire rod, through cold rolling, is processed to produce wire, nail, etc.

[ILLUSTRATION OMITTED]

Sponge Iron

Iron ore generally contains chemicals that have to be removed. Therefore, iron ores have to be processed into sponge iron with high iron content. Sponge iron (Fe) is the product of reduction of pellet pel·let
n.
1. A small pill; a pilule.

2. A small rod-shaped or ovoid mass, as of compressed steroid hormones, intended for subcutaneous implantation in body tissues to provide timed release over an extended period of time.
 or iron ore. In the reduction process, iron ore pellets (Fe2O3 and Fe3O4) and liquefied natural gas liquefied natural gas: see under natural gas.
Liquefied natural gas (LNG)

A product of natural gas which consists primarily of methane. Its properties are those of liquid methane, slightly modified by minor constituents.
 (CH4) and water steam (H2O) are put in a reactor. The process is called direct reduction of iron (DRI See Digital Research.  process).

The only company has the facility, direct reduction plant, in the country is PT Krakatau Steel (PT KS). It has three unit of DRI plant namely HYL HYL Hydroxylysine
HYL Hyland Hall (University of Scranton)
HYL Hardcore Youth Legion
 I, HYL II and HYL III. The DRI technology came from Mexico. Ony two of the three units are in operation. The one is out of function.

The two sponge iron factories have a production capacity of 2.3 million tons of sponge iron a year. The first unit Hyl I started operation in 1979 using four modules of batch process with one module having 2 reactors. The unit has a production capacity of 1 million tons of sponge iron a year.

The second unit, Hyl III, started operation in 1994 using 2-shafts continuous process. This unit has an annual production capacity of 1.3 million tons. In addition to sponge iron, other basic materials are scrap and HBI (hot briquette Iron).

Sponge iron is easily oxidized oxidized

having been modified by the process of oxidation.


oxidized cellulose
see absorbable cellulose.
. It needs special care both in storage and transport.

Therefore, sponge iron plant is generally integrated with slab or billet factories. Billet and slab factories not integrated with sponge iron plant use scarp and HBI as the basic materials.

Flat Steel Products

Steel Making (Slab)

Steel slab is produced through the melting of sponge iron (80%) and steel scrap (20%) in an electric arc furnace An electric arc furnace (EAF) is a furnace that heats charged material by means of an electric arc.

Arc furnaces range in size from small units of approximately one ton capacity (used in foundries for producing cast iron products) up to about 400 ton units used for secondary
 (EAF EAF - Effort Adjustment Factor ) to turn out liquid steel, which is then poured into a continuous casting Continuous casting is a refinement of the casting process for the continuous, high-volume production of metal sections with a constant cross-section. It allows lower-cost production of metal sections with better quality, due to finer control through automation of the casting  machine (CCM CCM Contemporary Christian Music
CCM Critical Care Medicine
CCM County College of Morris (New Jersey)
CCM Chama Cha Mapinduzi (political party, Tanzania)
CCM CORBA Component Model
) to produce raw steel.

Slab is used as the basic material for hot rolled steel coil and steel plates.

Slab has a width dimension of 1,000 mm, thickness of 200 mm, and length of 6,000 mm. It could weigh up to 30 tons per. The type produced by Krakatau Steel is low carbon.

Slab is processed into HRC and HR plate through hot strip machine (HSM (1) (Hierarchical Storage Management) The automatic movement of files from hard disk to slower, less-expensive storage media. The typical hierarchy is from magnetic disk to optical disc to tape. ) which reduces the thickness continuously into coil.

Steel plate is processed through reversing mills, which reduces the thickness of slab to turn out steel plates with a desired thickness.

[ILLUSTRATION OMITTED]

The only slab producer in the country is PT Krakatau Steel. PT KS has two slab factories. The first is SSP-1, which uses the technology of MAN GHH GHH Galveston, Houston, and Henderson Railroad  from Germany with an annual production capacity of 1 million tons. The second unit is SSP-2, which uses the technology of Voest Alpine ALPINE Antihypertensive Treatment and Lipid Profile in a North of Sweden Efficacy Evaluation (drug trial)
ALPINE Advanced Logistics Program Integration and Engineering
 from Austria and has an annual production capacity of 850,000 tons.

HRC/P (hot rolled coil/plate)

Production Process

Hot rolled coils or plates are produced by using steel slab as the basic material. The thickness is set in a hot strip mill (HSM).

The slabs are first heated in a reheating Reheating

The addition of heat to steam of reduced pressure after the steam has given up some of its energy by expansion through the high-pressure stages of a turbine.
 furnace furnace, enclosed space for the burning of fuel. There are many kinds of furnaces, the type depending upon the fuel and the use to which the heat produced within it is put. Most familiar are the furnaces used in the heating of buildings.  to be processed in sizing press and roughing mill. The steel material, then is made thinner in a hot roll finishing stand and hot skin pass mill. The steel sheets produce din DIN - Deutsche Institut fuer Normung. The German standardisation body, a member of ISO.  the process are then put into a down coiler to be rolled into hot rolled coils.

Hot rolled coils have a grade based on chemical composition and mechanical properties varying depending on the end use.

Hot rolled plate is produced from steel slab. There are two processes of producing hot rolled plate in the country:

* The process used by PT KS Using hot strip mill tandem stand continually. PT KS has 6 units of stand.

* Process used by other producers (PT GDS GDS Global Distribution System
GDS Google Desktop Search (Google)
GDS Goodie Domain Service (Vienna University of Technology, Austria)
GDS Guards
, PT JPS JPS Jewish Publication Society
JPS John Peter Smith (Hospital; Texas)
JPS Justice & Public Safety
JPS Jean Piaget Society
JPS Juvenile Polyposis Syndrome
JPS Joint Planning Staff
 and PT GRP GRP Group
GRP Group (file name extension)
GRP Glass Reinforced Plastic
GRP Gastrin-Releasing Peptide (biology)
GRP Gross Rating Point (advertising) 
) Using reversing mill to reduce the thickness of slab with the process of 4 high stand mill.

Hot rolled plate has grades based on chemical composition and mechanical properties which vary depending on the end uses

[ILLUSTRATION OMITTED]

HRC/Plate producers

The largest producer of HRC/plate in the country is PT Krakatau Steel with an annual production capacity of 1,850,000 tons of HRC and 150,000 tons of HR plates.

Hot rolled plates produced by PT KS, used mainly by ship building, steel structure and pipe manufacturing industries manufacturing industries nplindustrias fpl manufactureras

manufacturing industries nplindustries fpl de transformation

, have meet international standards such as American Petroleum Institute (API (Application Programming Interface) A language and message format used by an application program to communicate with the operating system or some other control program such as a database management system (DBMS) or communications protocol. ) especially for oil and gas industry, and American Society Testing Material (ASTM ASTM
abbr.
American Society for Testing and Materials
), British Standard (BS), British Standard Europe Norm (BSEN BSEN Biological Systems Engineering ) and Japan Industrial Standard (JIS JIS Japanese Industrial Standard
JIS Jamaica Information Service
JIS Juggling Information Service
JIS Just in Sequence (automotive industry)
JIS Jakarta International School
JIS Joint Information System
).

PT Gunung Raja Paksi of the Gunung Garuda Group is a new comer com·er  
n.
1. One that arrives or comes: free food for all comers.

2. One showing promise of attaining success: a political comer.

Noun 1.
 in the steel plate industry. The company was established in 1998 and started operation in 2000. It uses second hand machines imported from Sweden. It has an annual production capacity of 500,000 tons consisting of 350,000 tons of HR plates and 150,000 tons of HRC. Most of its production of HRC is used as basic material to produce various steel materials for construction by the group.

The Gunawan Group with its two HR plate factories namely. PT Gunawan Dianjaya Steel and PT Jaya Pari Steel is the largest HR plate producer in term of production capacity.

PT Gunawan Dian Jaya, which has an annual capacity of 350,000 tons, is located on a 15 hectare hectare (hĕk`târ, –tär), abbr. ha, unit of area in the metric system, equal to 10,000 sq m, or about 2.47 acres.  plot of land in Surabaya using U.S. technology. The company uses basic material entirely imported. Around 80% of its production are exported to Europe.

PT Jaya Pari Steel (JPS) which is also a sister company of GDS has been publicly listed in 1989. The integrated steel factory has an annual capacity of 100,000 tons.

Cold Rolled Coil/Sheet (CRC/S)

Production Process

Cold rolled steel is an intermediate material, CRC/S is processed through cold rolled mill (CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. ) using HRC as feedstock feed·stock  
n.
Raw material required for an industrial process.

Noun 1. feedstock - the raw material that is required for some industrial process
raw material, staple - material suitable for manufacture or use or finishing
 with a thickness of 2 mm to 8 Mm, HRC is cleaned through continue pickling pickling,
n the process of cleansing from metallic surfaces the products of oxidation and other impurities by immersion in acid.


pickling
 line and then it is put into cold rolled mill, which serves as tandem for cold mill or reversing mill to reduce the thickness to 0,14 mm, After that it is cleaned in electrolytic e·lec·tro·lyt·ic
adj.
1. Of or relating to electrolysis.

2. Produced by electrolysis.

3. Of or relating to electrolytes.



e·lec
 cleaning line and made normal again in continuous annealing line or batch annealing furnace.

The next process is by putting it into temper mill The introduction to this article provides insufficient context for those unfamiliar with the subject matter.
Please help [ improve the introduction] to meet Wikipedia's layout standards. You can discuss the issue on the talk page.
 to become CRC/S, CRC/S has grade base don the chemical composition and mechanical properties which vary depending on the end product to be produced. See the following table that shows the size of CRC/S produced in the country.

[ILLUSTRATION OMITTED]

The process shown in the diagram is used by PT Krakatau Steel and PT Essar. Another type of process to produce CRC is reversing mill such as used by PT Industri Baja Garuda, PT Little Giant and PT Intan Nasional Steel. In the reversing mill process, the basic material is thinner than one use din cold mill tandem.

CRC/Sheet producers

Until now Indonesia has 5 companies producing CRC/S. The five companies are PT Krakatau Steel, PT Essar Dhanajaya, PT Little Giants, PT Baja Berlian Utama, and PT Intan Nasional Steel all with a total capacity of 1.61 million tons a year. CR mills are located in a number of areas in Banten, West Java, Central Java Central Java (Indonesian: Provinsi Jawa Tengah) is a province of Indonesia. The administrative capital is Semarang. It is one of the six provinces of the island of Java. Central Java is both a political entity and a cultural concept.  and North Sumatra North Sumatra (Indonesian: Sumatera Utara) is a province of Indonesia. Its capital is Medan. Geography and population
The province of North Sumatra stretches across the island of Sumatra between the Indian Ocean and the Strait Malacca.
.

PT Krakatau Steel started producing CRC/S with an annual capacity of 850,000 tons, but the capacity was later reduced to 650,000 tons to suit its machines and production range.

From September 2002 to January 2003, PT Krakatau Steel has revamped its CR mill to reach original capacity of 850,000 tons per annum Per annum

Yearly.
.

PT KS is the largest producer of CRC/S in the country. PT KS has an integrated facility. The state steel maker could provide feedstock for its own CR mill. The main basic material for CRC/S is HRC. In fact PT KS is the only producer of HRC in the country. Other producers of CRC/S are either buying from PT KS or importing basic materials from various countries.

PT Essar Dhanajaya (ED) was established in 1996 as a joint venture between PT Garama Adipratama and Essar Group from India with an initial capacity of 200,000 MT. This company increased its capacity by 200,000 tons to 400,000 tons by mid 2003. Most HRC feedstock for PT ED is supplied by it's mother group company namely Essar Steels Limited, which is a large steel integrated plant in India.

Other smaller producers with an installed annual capacity of 100,000 tons include PT Little Giant from the Raja Besi Group and PT Baja Berlian Utama from the Industri Baja Garuda Group, These producers operate at less then 50% of capacity for their captive captive

said of naturally wild or feral animals kept in captivity for educational and scientific investigation with no attempt being made to domesticate them.
 consumption.

Little Giant produces CRS CRS Course
CRS Certified Residential Specialist (real estate certification)
CRS Central Reservation System
CRS Can't Remember Stuff (polite form)
CRS Cost Reduction Strategy
CRS Consumer Relations Specialist
 used as feedstock for steel pipe using for construction industry. This company has no facility for Pickling (Pickling Line), Baja Berlian Utama also has no facility for Annealing like BAF BAF British Athletics Federation  (Batch Annealing Furnace) and Pickling facility and procure To cause something to happen; to find and obtain something or someone.

Procure refers to commencing a proceeding; bringing about a result; persuading, inducing, or causing a person to do a particular act; obtaining possession or control over an item; or making a person
 Hot Rolled Pickled pick·led  
adj.
1. Preserved in or treated with pickle.

2. Slang Intoxicated; drunk.


pickled
Adjective

1. (of food) preserved in a pickling liquid

2.
 Oiled Coils (HRPO HRPO Highland Road Park Observatory (Louisiana) ) to roll it as CRC for their captive consumption for Galvanizing galvanizing, process of coating a metal, usually iron or steel, with a protective covering of zinc. Galvanized iron is prepared either by dipping iron, from which rust has been removed by the action of sulfuric acid, into molten zinc so that a thin layer of the zinc  lines. Procurement The fancy word for "purchasing." The procurement department within an organization manages all the major purchases.  of HRPO is sensitive to market availability and pricing.

Long Products

Billet

Billet is used as the basic material for steel long products. Billet is produced through the same process used in the production of slabs. The difference lies in the size as set by the mold mold, name for certain multicellular organisms of the various classes of the kingdom Fungi, characteristically having bodies composed of a cottony mycelium. The colors of molds are caused by the spores, which are borne on the mycelium. . The sizes of billet have dimensions of 110x110mm, 120x120mm, 130x130mm, with maximum length of 12,000 mm.

[ILLUSTRATION OMITTED]

The country has 18 billet plants in operation. Most of them are integrated with downstream factories like concrete reinforcing iron plant or wire rod plant. Among the companies operating integrated facility are PT. Krakatau Steel, PT. Gunung Gahapi, PT. Inti General Yaja Steel, and PT. Growth Sumatra.

In term of capacity, PT. Ispat Indo is the main player in billet industry with an annual production capacity of 700,000 tons. Its billet factory is integrated with wire rod plant which has an annual production capacity of 700,000 tons and concrete reinforcing iron plant which has an annual production capacity of 200,000 tons.

PT. Krakatau Steel (PT. KS) is second in capacity with an annual production capacity of 675,000 tons. Krakatau Steel has a wire rod plant with an annual production capacity of 450,000 tons. It also has concrete reinforcing iron plant under its subsidiary PT Krakatau Bajatama.

With an annual production capacity of 40,000 tons, PT. Pabrik Besi Baeawaja is the smallest billet producer.

Wire rod

Most wire rod factories such as those of Ispatindo and Krakatau Steel are integrated with billet plant. The process of producing wire rod and reinforcement bar is almost the same.

Before being rolled, billet is first heated in a reheating furnace. From the reheating furnace, the material is rolled until it has a desired diameter and the wire rod produced in the process is rolled in a rolling machine A rolling machine is a machine that is designed to roll either tobacco or cannabis into individual cigarettes or joints. To roll a cigarette (B) with cannabis, one must break up the smoking material (C) as well as remove any stems so they won't puncture the paper. .

Following is the configuration of wire rod making machine owned by PT Ispatindo with an annual production capacity of 700,000 tons.

Wire Rod Mill facilities in PT Ispatindo

* 85 tons/hr. walking hearth top fired Billet reheating furnace.

* Full continuous H-V compact cantilever ESS (1) (Electronic Switching System) A large-scale computer from Lucent used to route telephone calls in a telephone company office. The 5ESS is a Class 5 central office switch, and the 4ESS is a Class 4 tandem office switch.  stands with independently driven D.C. motor.

* Super heavy duty high speed (100 M/sec) wire finishing block of 10 stands (BGV BGV Background Vocal (music)
BGV Bateau à Grande Vitesse (French: Fast Boat)
BGV Boost Glide Vehicle
BGV Below Ground Vault
BGV Blood Glucose Value
BGV Bassett Griffon Vendeen
 200/160) with inter-stand cooling arrangements.

* Controlled water cooling Water cooling is a method of heat removal from components. As opposed to air cooling, water is used as the heat transmitter. Water cooling is commonly used for cooling internal combustion engines in automobiles and electrical generators.  system (METEC) from Morgan with most modern facilities.

* 106 meter long Stelmor type roller cooling conveyor Conveyor

A horizontal, inclined, declined, or vertical machine for moving or transporting bulk materials, packages, or objects in a path predetermined by the design of the device and having points of loading and discharge fixed or selective.
 equipped with insulation insulation (ĭn'səlā`shən, ĭn'sy–), use of materials or devices to inhibit or prevent the conduction of heat or of electricity.  hoods as well as air blowers for retarded re·tard·ed  
adj.
1. Often Offensive Affected with mental retardation.

2. Occurring or developing later than desired or expected; delayed.
 and accelerated cooling of wire rod.

Coil collection system on Trestles This article is about the surf spots. For the table, see trestle table. For the type of bridge, see trestle.
Trestles is a collection of surf spots in San Onofre, CA near the Orange County border.
 having easy down device for good coil formation. With CEDA/DANIELI complete automation system for controlling rolling sequence. Automatic compacting, tying and weighing system.

The largest producers of wire rod in Indonesia is PT Ispatindo, which has an annual production capacity of 700,000 tons. Its factory is integrated with its billet in the upstream sector and wire factory in the downstream sector.

In addition to wire rod, PT Ispatindo produces concrete reinforcing iron with an annual production capacity 200,000 tons. The company manufactures a wide range of low and high carbon grades of billets, wire rods and bars using approximately 65% of scrap and 35% of DRI/Pig Iron. The mix varies according to according to
prep.
1. As stated or indicated by; on the authority of: according to historians.

2. In keeping with: according to instructions.

3.
 the grade of steel produced.

PT. Ispat Indo has a strong foothold foot·hold  
n.
1. A place providing support for the foot in climbing or standing.

2. A firm or secure position that provides a base for further advancement.


foothold
Noun

1.
 in neighboring neigh·bor  
n.
1. One who lives near or next to another.

2. A person, place, or thing adjacent to or located near another.

3. A fellow human.

4. Used as a form of familiar address.

v.
 markets and is strategically well positioned for trading throughout the world. It sells approximately 70% of its products on the domestic market and about 30% in export markets of the fast growing Asia-Pacific region. It is the largest wire rod producer in Indonesia with the highest market share. Ispat Indo is known for shortest delivery period with highly flexible product mix at the most competitive prices.

PT. Ispat Wire Products (IWP IWP International Writing Program (University of Iowa)
IWP Institute of World Politics
IWP Ice Water Path
IWP Immigrant Women Program
IWP Iraq Water Project
IWP Idaho White Pine (lumber) 
) is a wholly owned subsidiary Wholly Owned Subsidiary

A subsidiary whose parent company owns 100% of its common stock.

Notes:
In other words, the parent company owns the company outright and there are no minority owners.
 of PT. Ispat Indo and is engaged in downstream activities like wire drawing, nail making, production of straight bar, etc.. IWP primarily consumes wire rod from Ispat Indo for finished products to be sold domestically as well as exports. Capacity--Wire drawing and nail making--36,000 MT per year, Straight bar--75,000 MT per year.

The second largest wire rod producer is PT Krakatau Steel with an annual production capacity 450,000 tons. PT Ispatindo and PT Krakatau Steel dominate steel industry. Therefore, if one of the two is facing trouble or suspends operation for some trouble or being under maintenance, supply of wire rod often falls short 1 of requirement in the market.

Reinforcement Bars

Reinforcement bars or concrete reinforcing iron is produced from billet or ingot ingot

Mass of metal cast into a size and shape such as a bar, plate, or sheet convenient to store, transport, and work into a semifinished or finished product. The term also refers to a mold in which metal is so cast.
 with the process of hot rolling. Most reinforcement bar factories are integrated with billet factory. The process of producing reinforcement bars is almost the same as that of producing wire rod.

Following are examples of machines owned by PT Ispatindo to produce reinforcement bar with an annual production capacity of 200,000 tons.

Bar Mill facilities in PT Ispatindo:

* 35 tons/hr. pusher type billet reheating furnace.

* 2 nos. 3 high roughing stands and 10 nos. 2 high intermediate stand

* No twist Block of 8 stands--60 m / sec.

* Garret Coiler.

* Cooling Bed for straight Bars/Turn forming for coils.

There are 32 reinforcement bar factories in Indonesia with total annual capacity is around 3.19 million tons, but not all of them are in operation.

Steel Section

There are two types of steel section (angle and profile iron) by size namely light and heavy profile iron. Light profile iron is angle or profile iron smaller than 80 mm. Heavy profile iron is one larger than 80 mm in size. The steel products are used widely in property, bridge, tower and electric transmission pole construction pole construction

Method of building that dates back to the Stone Age. Excavations in Europe show rings of stones that may have braced huts made of wooden poles or weighted down the walls of tents made of animal skins supported by central poles.
.

The country's installed capacity of angle and other types of profile iron is 1.26 million tons a year with 25 producers. The types of profile iron produced by the companies include angle iron, profile L, U, I and H. The largest producer is PT Gunung Garuda with an annual production capacity of 350,000 tons of heavy profile iron of more than 80 mm.

Production capacity almost stagnant stagnant /stag·nant/ (stag´nant)
1. motionless; not flowing or moving.

2. inactive; not developing or progressing.
 

Indonesia's steel industry has not expanded significantly in the past 10 years. The production capacity for various types of steel products has been almost unchanged. Increase has been recorded only in the capacity of a few types of the products, but there is also a decline in the production capacity of certain products.

The only producer of sponge iron and slabs has so far been PT Krakatau Steel and the production capacity has remained the same. A decline is even recorded in production capacity for billet as some producers have stopped operation. Increase in production capacity is recorded mainly for steel bars such as reinforcement bar and steel wire rod. The capacity for concrete reinforcing iron doubled to 4.4 million tons from 2.2 million tons a year and the capacity for wire rod rose from 865,000 tons to more than 1 million tons annually. The increase in capacity was recorded mainly in 1996-1997 before the crisis hit the country.

A faster growth was recorded for GI Sheet industry with capacity rising from 508,000 tons in 1995 to 1.2 million tons in 2005. The increase in production capacity was recorded in 1995-1996 with expansion such as by BlueScope Indonesia, formerly named Bernama BHP Steel and construction of new factories by PT Bisma Narendra and PT Essar Dananjaya.

Major Players in Steel Industries

PT Krakatau Steel

PT Krakatau Steel is the only company having integrated steel factory in Indonesia. PT KS has factories including 2 units of sponge iron factory, 2 units of steel slab factory, 1 unit of steel billet factory, 1 unit of hot rolled coil factory, 1 unit of cold rolled coil factory and 1 unit of wire rod factory.

Installed Capacity

* Sponge iron factory (Direct Reduction Plant) with annual production capacity of 2.3 million tons of sponge iron:

- HYL I : 1 million tons

- HYL III : 1.3 million tons

* Slab Steel Plant with an annual production capacity of 1.8 million tons.:

- SSP (1) (Service Switching Point) The local exchange node in an SS7 telephone network. The SSP can be part of the voice switch or in a separate computer connected to it.  I : 1 million tons

- SSP II : 800,000 tons

* Billet Steel Plant with an annual production capacity of 675,000 tons.

* Hot Strip Mill with an annual production capacity 2 million tons.

* Cold Rolling Mill with an annual production capacity of 650,000 tons.

* Wire Rod Mill with an annual production capacity of 450,000 tons.

PT Krakatau Steel also has subsidiaries operating in steel industry namely PT Krakatau Bajatama, which produces concrete reinforcing iron, PT KHI khi
n.
Variant of chi1.
 Pipe Industries producing spiral welded pipes, PT Cigading Habeam producing heavy profile iron. Krakatau Steel also has stakes in a number of other subsidiaries.

Krakatau Steel dominates production of steel sheets mainly HRC and CRC and steel bar mainly wire rod.

Ispatindo

Ispatindo is the main player in wire rod industry with an annual production capacity of 700,000 tons.

PT Ispatindo was established in 1976 with annual capacity of its rolling mill of 60,000 tons.

Ispatindo has a billet factory with an annual production capacity of 700,000 tons, a wire rod factory with an annual capacity of 700,000 tons and a concrete reinforcing iron plant with an annual capacity of 200,000 tons.

PT Ispatindo also has a subsidiary namely PT PT. Ispat Wire Products (IWP) which operates in wire rod industry producing wire, nail, straight bar and other products of wire rods. Its has an annual capacity to produce 36,000 tons of wire and nail and 75,000 tons of straight bar.

PT Ispatindo planned to build a sponge iron plant before the crisis but the plan failed to come to reality because of the crisis in 1997/1998.

Gunung Garuda

Gunung Garuda is the largest producer of heavy profile iron. Most steel factories producing profile iron use steel plate as the basic material. PT Gunung Garuda produces heavy profile iron from billet rolled into profile iron. With production capacity of 350,000 tons, Gunung Garuda dominates the market of heavy profile iron.

Gunung Garuda also has a Hot rolled Coil/Plate factory with an annual production capacity 500,000 tons. The Gunung Garuda group, therefore, does not only sell steel building materials Building materials used in the construction industry to create .

These categories of materials and products are used by and construction project managers to specify the materials and methods used for .
 but also offer the concept of Pre-Engineered Building (PEB PEB Physical Evaluation Board
PEB Presidential Emergency Board
PEB Post Exposure Bake
PEB Professional Engineers Board (Singapore)
PEB Pre-Engineered Building
PEB Personal Electronic Ballot
PEB Performance Evaluation Board
) service, which is steel construction prepared by its factory ready for fixing. This concept is more efficient in the use of steel as factory produces the steel frame according to requirement that consumers have no steel wasted.

Essar Dananjaya

The Essar group is a producer of steel from India building CC factory in Indonesia in 1997 and is the only CRC producer beside PT KS. It uses the rolling process. Other CRC producers use reversing mill.

Essar expanded rapidly after it started operation in 1997 with an annual production capacity of 200,000 tons, Later Essar expanded its production capacity to 400,000 tons. PT Essar Dananjaya also has built a GI sheet factory with an annual 150,000 tons.

Jakarta Cakra Tunggal

The country has 32 companies producing concrete reinforcing iron with a total production capacity of 3.19 million tons a year. Among the companies are PT Jakarta Cakra Tunggal, which is the largest with an annual production capacity of 360,000 tons. The subsidiary of the Argo Pantes also has another factory producing concrete reinforcing iron under PT Budi Dharma dharma (där`mə). In Hinduism, dharma is the doctrine of the religious and moral rights and duties of each individual; it generally refers to religious duty, but may also mean social order, right conduct, or simply virtue.  Steel (PT BDS BDS
abbr.
Bachelor of Dental Surgery


BDS Bachelor of Dental Surgery

BDS n abbr (= Bachelor of Dental Surgery) → título universitario

BDS 
) with an annual production capacity of 160,000 tons.

Production Development

The capacity utilization of the country's steel industry is relatively low in the past 5 years especially billet and concrete reinforcing iron industries. However, the two industries recorded a fast growth in production. Billet production grew by 17.2% annually and production of concrete reinforcing iron increased by 16.7 %.

In 1998, production of concrete reinforcing iron totaled 2.3 million tons, down to 1.1 million tons in 2001. In 2005, the production surged to 2 million tons with the revival of the property industry.

The country's production sheet steel both HRC and CRC has been relatively stable over the past several years.

Sponge Iron

Production of sponge iron of PT KS has declined sharply in the past several years--down from 1.7 million tons in 2000 to 1.4 million tons in 2004 and to 1.2 million tons in 2005.

Problem faced by PT KS at present is shortage in gas supply from Pertamina. In the past several years KS received only 80%% of its gas requirement. The supply is feared to decline further as Pertamina has also to supply gas to fertilizer fertilizer, organic or inorganic material containing one or more of the nutrients—mainly nitrogen, phosphorus, and potassium, and other essential elements required for plant growth.  companies.

Slab

The country's production slab from the only producer PT KS has been stable at around 1.2 million--1.3 million tons. The slab production of KS very much depends on production of sponge iron. The entire slab production of the company has been used for its slab production unit. Other consumers of sponge iron, therefore has to rely on imports.

PT Krakatau Steel has several times planning to expand its capacity in the upstream sector of its industry. In 1994, when Habibie was the research ministry and head of Strategic Industry Agency PT Krakatau Steel planned to build second generation steel mill. Feasibility study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented.  on the plan was already carried out by UNIDO, and JICA. POSCO of South Korea and BHP from Australia had indicated interest in building the project, The project, however, was shelved or cancelled.

Early, 2006, PT Krakatau Steel planned again to build upstream steel industry. It planned to build thin slab flat rolling mill. The project has attracted investors from Italy, South Korea and other countries. However, implementation of the project is now in big question after Vice President Jusuf Kalla said the project to be built in Cilegon is not feasible as it has strong support from the availability of basic material, and guarantee in energy supply. The availability of basic materials, therefore is vital to create a strong steel industry.

Kalla, therefore, suggested development of upstream industry in South Kalimantan where large reserve of iron ore has been found and energy supply is more guaranteed than if the facility is built in Java. The problem with South Kalimantan, however, is inadequate infrastructure that needs large additional investment.

Implementation of the project, however, will likely remain in the pipeline for a longer time to come. The plan to build it in Cilegom has been virtually scrapped and the idea of moving it to South Kalimantan will need further mulling over. PT KS has to start calculation all over again from the beginning.

HRC and CRC

Krakatau Steel is the only producer of iron slab in the country. Slabs are used as a basic material for HRC/Plate. HRC produced by Krakatau Steel is used mainly to feed its CRC/S plant.

Cold rolling mill needs HRC with a thickness of 1.8--3 mm as a basic material. HRC production of PT KS is only 700,000 tons of one with a thickness of less than 3 mm barley barley, annual cereal plant (Hordeum vulgare and sometimes other species) of the family Gramineae (grass family), cultivated by humans probably as early as any cereal.  enough to meet its requirement of 650,000 tons annually.

KS, therefore, could not supply three other CRC producers in the country with HRC.

The three other consumers of HRC needs around 300,000 tons of that material a year that have to be imported. The import duty on HRC is %.

Billet and reinforcement bars

The country's production of billet declined with the rising production cost as a result of the oil fuel price hike. Meanwhile, billet producers in the country are no longer efficient as they use old machines aging from 20 to 30 years. Local product of billet, therefore, could not meet imported products in market competition. In fact, many billet factories have stopped operation.

In 2004-2005, here was a surge in the production of billet with the revival of the construction industry and property sector in the country. The increase in the prices of wooden building material has contributed to rising demand for steel building materials.

Concrete reinforcing iron industry also grew fast during that period. In 2005, the country's production of concrete reinforcing iron totaled 2 million tons nearly reaching the peak production of 2.2 million tons in before the crisis hit the country in 1997.

Import Duties

The government has sought to harmonize import duty tariffs on steel products but the business sector still complained as the new tariffs failed to prevent imports. The import duty of 0% on billet was blamed for the in-competitiveness of local products. Many factories chose to stop producing billet instead they import the material although the factories are integrated facilities having billet and concrete reinforcing iron production plants.

HRC with thickness of less than 3mm could be produced locally only by Krakatau Steel and it its production is used to feed only its CRM factory that other CRC producers have to rely on import for HRC. The import duty of 5% on HRC makes it difficult for locally produced CRC to compete in the market against PT KS's CRC and imported CRC.

Currently China is having surplus of HRC/Plate with a thickness of more than 3 mm for general construction and for pipe basic material as well as HRC with a thickness of 3 mm or less to be used as basic material for CRC, which is to be as the basic material for GI sheet.

China, therefore, offers its products in cheaper price. As a result PT KS suffer in market competition in the country. PT KS, therefore, filed an anti dumping petition against imported products from China. However, move to impose a high import duty on HRC is opposed by local producers of CRC and GI Sheet.

The change in the map of world trade as a result of fall in demand from China, which in fact has even become a net exporter will necessitate ne·ces·si·tate  
tr.v. ne·ces·si·tat·ed, ne·ces·si·tat·ing, ne·ces·si·tates
1. To make necessary or unavoidable.

2. To require or compel.
 protection for local products. Harmonization of tariff could not be coped with by considering only the interest of certain sector of the industry but it should be based on the national interest.

With the absence of a grand strategy of the government in the development of the manufacturing sector, import duty will continue to trigger domestic controversy. The government has no strong legal argument when slashing slash·ing  
adj.
1. Bitingly critical or satiric: slashing wit.

2. Dashing; pelting: a slashing hailstorm.

3.
 or raising import duties.

In countries which have good grand design for their industries, import duties are part of their industrialization industrialization

Process of converting to a socioeconomic order in which industry is dominant. The changes that took place in Britain during the Industrial Revolution of the late 18th and 19th century led the way for the early industrializing nations of western Europe and
 strategy as in determining an import duty will always draw opposition and support. Without a clear vision of the government that could be accepted by all, the controversy will be more intense.

Imports

A fast growth was recorded in imports of steel in 2004 and 2005 to follow the strong growth of the construction and property sectors, which use much both long and flat steel products. Meanwhile, China had a large surplus of HRC that it disposed of part of the surplus in Indonesian market with cheaper prices.

In general steel imports have increased affecting the local producers notably, which has long dominated the domestic market.

Exports up boosted by good prices

Boosted by good prices in international market, a number of steel factories increased exports in 2004 and 2005. Exported products include HRC/P. In 203, HRC/P exports totaled 148,000 tons valued at US$ 49 million. In 2004, exports shot up to 295,000 tons valued at US$ 148 million. In 2005, exports rose again to 354,000 tons valued at US$ 216 million.

Exports of steel bars have fluctuated. For example, exports of wire rod totaled 274,000 tons in 2001, down to 168,000 tons in 2003, before rising to 265,000 tons in 2004 See the following table.

Demand Aspects

Demands for steel in Indonesia have generally increased in the past 5 years, notably in 2004 and 2005 when the construction and automotive sectors recorded strong growth. Demand for steel bars and steel sheets grew fast.

The increased in demand was also boosted by declining price of steel in 2005 after China cut imports. China even started exporting HRC flooding the Indonesian market in 2005.

In 2006, however, demand fell again with the surge in the prices of oil fuels (BBM BBM Brokeback Mountain (book/movie)
BBM Bureau of Broadcast Measurement
BBM Bachelor of Business Management
BBM Break Before Make
BBM Bread Board Model
BBM Bulk Business Mail
BBM Bahn Brenner Motorsport
) late 2005. The fuel price hikes badly weakened the purchasing power Purchasing Power

1. The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing power is important because, all else being equal, inflation decreases the amount of goods or services you'd be able to purchase.

2.
 of the Indonesian people resulting in a decline in demand for steel products such as concrete reinforcing iron in the first half of 2006.

Prices

The prices of HRC began to scale up in 2001 notably late 2004 and early 2005 when demand from China was strong with the brisk Brisk as a proper name may refer to:
  • Brest, Belarus (Brest-Litovsk) Brisk (בריסק) is the city's name in Yiddish
  • The Brisk yeshivas and methods, a school of Jewish thought originated by the Soloveitchik family of Brest.
 development of infrastructure projects especially ahead of the Olympic Gaes in that country in 2008.

The price of HRC peaked at US$ 625 per ton in September 2004, when China imported needed large supply of the materials. In mid 2005, the price of steel began to decline as China began to post surplus after the operation of a number of new large steel factories. Supply began to exceed requirement. In 2005, the price of HRC fell to US$ 553 per ton.

The prices of HRC generally is used to serve as a reference for the prices of steel in international market. In 2005, the prices of HRC in Germany were higher than in China and in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. .

Early, 2006, the price of HRC began to climb again despite China's large surplus.

The increase in the HRC prices was caused by a number of factors such as scarcity Scarcity

The basic economic problem which arises from people having unlimited wants while there are and always will be limited resources. Because of scarcity, various economic decisions must be made to allocate resources efficiently.
 of basic material supply in the form of slab in the world market as a result of damage of factories owned by CSN CSN Crosby, Stills, and Nash (band)
CSN Centrala studiestödsnämnden (Swedish: state education grant and loan program)
CSN Confédération des Syndicats Nationaux (French) 
 (a large steel maker in Brazil) and Azovstal (in eastern Europe Eastern Europe

The countries of eastern Europe, especially those that were allied with the USSR in the Warsaw Pact, which was established in 1955 and dissolved in 1991.
).

The prices of steel on the domestic market generally follow the prices set by PT Krakatau Steel, which is normally based on the international prices.

The average prices of hot-rolled-coil/HRC), CRC and Wire rod in the local market tend to decline now after peaking early 2005. See the following table.

Production cost

The prices of HRC are also used as a reference in international market. The price of CRC is normally higher US$ 100 per ton. The following table shows estimates of production cost when the prices of industrial fuel surged to Rp 5,800 a liter liter, abbr. l, unit of volume in the metric system, defined since 1964 as equal to 0.001 cubic meters, or 1 cubic decimeter. A cube that has each of its edges equal to 10 centimeters has a volume of 1 liter. The liter is equal to 1.057 liquid quarts, 0.  late 2005.

Based on the estimates the production cost for a ton of HRC was Rp 4,893,000 and the selling price of that material paid by CRC producers was Rp 5,498,000 a ton. The production cost for CRC, therefore, was Rp 5,881,000 a ton--Rp 988,000 or US$ 105 higher than that of HRC.

The fact, however, is that the price difference between the imported products of HRC and CRC is not as much as US$ 100. Large producers in China often sell CRC at a price margin of much less than US$100 a ton. Therefore, it is difficult for local products of CRC with imported basic material to compete with Chinese products.

New Investment and Expansion

From 2005 through June 2006, there were a number of companies planning to build new steel factories or expanding heir factories. Investors are mainly interested in billet production, and downstream sector producing wire rod and concrete reinforcing iron.

The interest in producing concrete reinforcing iron and wire rod followed the revival of the construction sector in 2004. Most investors indicate interest in concrete reinforcing iron industry as it will need smaller investment. Investment in HRC and CRC is much larger.

There is little interest shown in venturing in upstream sector because of the large investment needed. Other than PT Krakatau Steel, long planning to build factory in the upstream sector is the Bakrie Group, which is known to have large factories in the downstream sector producing steel pipes. The company group plans to build integrated factories to produce HRC and HRP, which are needed in steel pipe industry. The plan, however, is still in the early stage and the project is to have an annual production capacity of 1 million tons. No further details have been available yet.

Development of Upstream Steel Industry

Twenty years TWENTY YEARS. The lapse of twenty years raises a presumption of certain facts, and after such a time, the party against whom the presumption has been raised, will be required to prove a negative to establish his rights.
     2.
 ago Indonesia was far ahead other Asean countries in steel industry. However, now Thailand and Malaysia have left the country behinds. In 1994, Indonesia's crude steel production totaled 3.2 million tons as against Malaysia's 2.05 million tons and Thailand's 1.46 million tons. In 2003, Malaysia already led with a production of 3.96 million tons of crude steel as against Indonesia's 2.04 million tons. In the same year Thailand also increased its production to 3.57 million tons.

Noteworthy is in hot rolled steel industry. In 1994 Thailand produced only 2.11 million tons of hot rolled steel, surging to 7.49 million tons in 2003. Meanwhile, Indonesia's production of hot rolled steel totaled only 3.71 million tons in 2003 down from 4.29 million tons in 1994.

The fast growth of the steel industry in Thailand contributes to rapid expansion of its automotive industry The automotive industry is the industry involved in the design, development, manufacture, marketing, and sale of motor vehicles. In 2006, more than 69 million motor vehicles, including cars and commercial vehicles were produced worldwide.  especially its hot rolled steel industry. Thailand, even Malaysia, already left Indonesia behind in automotive industry although Indonesia started 20 years earlier and become the pioneer in automotive industry in southeast Asia.

Conflicting interests have slowed expansion of the country's integrated steel industry. The plan to build a second generation steel mill with a production capacity of 4 million tons a year failed because of conflicting interests between investors close to those in power. At that time, the planned to involve partners from South Korea, Australia, and Germany. The project, therefore was split into small ones that could not compete in the world market.

Similarly, a plan to build one with tender to be held this year, has been abandoned after Vice President Jusuf Kalla suggested construction of the new facility should be in area close to the source of basic material in South Kalimantan. Originally PT Krakatau Steel planned to build the facility in its complex in Cilegon, Banten.

The suggestion by Kalla has good reason but it needs studies from the beginning to determine the strength of the iron ore reserve in South Kalimantan to ensure that it is feasible and enough to warrant construction of an expensive project. The new project will be more expensive as it will need construction of new infrastructure, which is already available in Cilegon.

The government will need to offer incentives to attract investors. PT Krakatau Steel could not longer be entirely relied on to build a new steel project in large scale such as one to be built in South Kalimantan. Facility provided so far for PT KS proved to be not effective in driving the country's steel industry after so many years.

A new body might be needed to handle development of steel industry to provide a rival for PT KS to prevent domination by one large company and create a healthy competition in the market. PT KS has long enjoyed monopoly and has no initiative to expand itself.

Pipe factories using HRC from PT KS have often complained about prices being too high, delivery being set by PT KS. Consumers were more often forced to accept the terms set by PT KS as imports are not easy.

Demand Projection

Demand for steel bars including billet, wire rod and concrete reinforcing iron, is forecast to rise in the next five years based on the trend in the past five years. Demand for steel bars will follow the trend of the construction industry, which is expected to grow in the coming years. In the wake of the monetary crisis in 1997/1998, the construction industry shrank resulting in a decline in demand for concrete reinforcing iron and wire rod. Demand for the two steel materials began to scale up in 2001 and the trend continued in the following years. In 2004 and 2005 demand for steel bars including concrete reinforcing iron and wire rod already reached the pre crisis level. The rising trend is expected to continue in the coming years.

Demands for billet, concrete reinforcing iron and wire rod in the pasty five years have increased by 16%, 17% and 14% annually respectively. In the coming five years the demands are expected to grow more or less by the same rates. Therefore, in 2010, demand for billet is is predicted to reach 6.20 million tons, demand for concrete reinforcing iron/light profile is estimated to total 4.46 million tons, and demand for wire rod 1.75 million tons.

Demand for steel plates is also predicted to rise although not as fast as concrete reinforcing iron, as the consumers of steel plate mainly the manufacturing sector will not grow as fast as the construction sector. In the past five years, demands for slab, HRC/Plate, and CRC/S have increased respectively by 6%, 6%, and 7% annually. It is expected that demands in the coming five years will grow more or less by the same rates. Therefore, in 2010, slab requirement will reach 2.42 million tons, HRC/Plate requirement 3.33 million tons and CRC/S requirement 1.91 million tons.

Therefore, the existing production capacity will not longer be sufficient to meet the domestic requirement. Without capacity expansion, the country will have to relay on import for the deficit in supply. New investment, therefore, is needed in the upstream sector to support expansion of the midstream mid·stream  
n.
1. The middle part of a stream.

2. The part of a course that is neither at the beginning nor at the end: the midstream of life.

Noun 1.
 and downstream sectors of the steel industry.

Conclusion and recommendation

* Indonesia's steel industry, which has been developed since 1970's has been sluggish and lagging Lagging

Strategy used by a firm to stall payments, normally in response to exchange rate projections.
 behind steel industry in other Asean countries such as Malaysia and Thailand, which began developing the industry only in the 1990s.

* Indonesia's steel industry has been dependent much on the upstream steel industry of PT Krakatau Steel especially for steel plates.

* In the past 10 years--1995-2005, the country's steel industry has been sluggish especially its upstream sector. For example, the production capacity for sponge iron of Krakatau Steel has not expanded after 30 years.

* Capacity expansion has been recorded only in the downstream sector such as concrete reinforcing iron, steel pipe and GI sheet industries.

* The main problem faced by the country's steel industry is heavy dependence on import for basic materials. Giant and integrated steel makers have dominated the market of steel basic materials, therefore, they tend to dictate the prices. The availability of supply and prices are determined by the strategy of the steel giants. Producers in Indonesia, therefore, more often could not compete well in the market.

* Steel demand in Indonesia is still relatively small compared with in other Asian countries. If the country's economy will expand by 6% annually as predicted by the government, demand for steel is expected to grow fast in the coming five years.

* It is time for Indonesia to build upstream steel industry to feed the country's down stream industry in the next five to en years.

* Another upstream industry as large as PT Krakatau Steel is needed to prevent strong domination by the sate owned steel maker and as domination tends to create unhealthy competition in the market.

* The plan to build a factory to produce steel pellet in South Kalimantan could be a breakthrough in the efforts to build a strong foundation of the iron ore reserve in that province.
Table--1
Profile of major HRC/Plate producers

                                                        Production
                                                         capacity
No.      Company       Location     Coil       Plate      (TPY)

1,    Gunung Raja      Cibitung     150,000   350,000      500,000
      Paksi
2,    Krakatau Steel   Cilegon    1,850,000   150,000    2,000,000
3,    Gunawan          Surabaya         --    350,000      350,000
      Dianjaya Steel
4,    Jayapari Steel   Surabaya         --    100,000      100,000
      Total capacity              2,000,000   950,000    2,950,000
      HR/Plate

SourceData

Table--2
Profile of major CR/Sheet producers

No.   Company                   Location   Production capacity
                                                  (TPY)

1     Essar Dhananjaya          Bekasi                 400,000
2     Industri Baja Garuda      Medan                  150,000
3     Intan Nasional Steel      Medan                   60,000
4     Krakatau Steel            Cilegon                850,000
5     Little Giant Steel        Semarang               150,000
      Total capacity CR/Sheet                        1,610,000

Source: Data Consult

Table--3
Producers of billet and
production capacity, 2005

                                 Installed cap.
Companies                        (000 tons/y)

Growth Sumatera Ind. Ltd, PT                330
Gunung Gahapi Sakti, PT                     300
Gunung Garuda, PT (billet)                  400
Hanil Jaya Metal Works, PT                  160
Inter World Steel Mill, PT                  250
Inti General Yaja Steel, PT                 160
Ispatindo, PT                               700
Jakarta Cakratunggal Steel, PT              420
Jakarta Steel Megahutama, PT                300
Jatim Taman Steel, PT                       200
Krakatau Steel, PT                          675
Pabrik Besi Barawaja, PT                     40
Pangeran Karang Murni, PT                   400
Pulogadung Steel, PT                         80
Toyogiri Iron & Steel, PT                   120
Kesa Indotama, PT
Sanex Steel Indonesia, PT
Bromo Steel, PT
Total                                     4,535

Source: Data Consult

Table--4
Profile of major wire rod producers

                                                Production capacity
No.   Company                        Location          (TPY)

1     Krakatau Steel                 Cilegon                450,000
2     Gunung Garuda                  Jakarta                 60,000
3     The Master Steel               Jakarta                250,000
4     Golgon                         Medan                   25,000
5     Growth Sumatra Industry Ltd.   Medan                   45,000
6     Gunung Gahapi Sakti            Medan                  100,000
7     Intan Nasional                 Medan                   45,000
8     Hanil Jaya Metal Works         Surabaya               100,000
9     Ispat Indo                     Surabaya               700,000
      Total capacity wire rod                             1,775,000

Source: Data Consult

Table--5
Profile of major producers of reinforcement bar

No.   Company                 Location    Production
                                          capacity (tons/y)

1     Jakarta Cakra Tunggal   Jakarta           360,000
2     Master Steel            Jakarta           250,000
3     Inter World Steel       Tangerang         240,000
4     Ispatindo               Sidoarjo          200,000
5     Hanil Jaya              Sidoarjo          196,000
6     Krakatau Wajatama       Cilegon           150,000
      Total capacity of                       3,190,000
        rebars producers

Source: Data Consult

Table--6
Profile of major producers of steel section

                                              Production
                                              capacity
No.Company                        Location    (tons/y)

1  Gunung Garuda                  Bekasi        350,000
2  Inter World teel               Tangerang     150,000
3  Krakatau Wajatama              Cilegon       150,000
4  Alim Ampuh Jaya Steel          Sidoarjo      110,000
5  Cigading Habeam Center         Cilegon       100,000
6  Hanil Jaya                     Surabaya       80,000
   Total production capacity of               1,260,000
   angle and profile iron

Source: Data Consult

Table--7
Production capacity of steel industry,
1995 & 2005

(000 tons/year)

                                           Production   Number of
      Types of                  Capacity     Capacity   companies
No.   steel product           Prod. 1995         2005        2005

1     Sponge iron                  2,300        2,300           1
2     Slab                         1,850        1,850           1
3     Billet                       4,961        4,785          18
4     Concrete iron/light          2,219        4,400          32
        profile iron
5     Wire rod                       865        1,015           9
6     Hot Rolled Coil (HRC)                     2,200           2
      HR Plate                                    920           4
      Total HRC/Plate              2,640        3,120           4
7     Straight/spiral              1,386        2,243          23
        welded pipes
8     CRC/Sheet                    1,296        1,350           5
9     BJLS/colored                   508        1,200          17
10    Tin Plate                      130          130           1

Source: Data Consult

Table--8

Steel production and capacity utilization, 2001-2005

(000' tons)

Types of
steel
product               2001    2002    2003    2004

Sponge iron          1,516   1,478   1,171   1,367
Steel slab           1,217   1,292   1,002   1,190
Billet                 952     976   1,042   1,199
Concrete             1,113   1,141   1,212   1,424
reinforcing
iron/light profile
Wire rod               610     625     578     651
HRC/Plate            1,935   2,032   2,190   2,442
CRC/Sheet              745     755     680     754

Types of                      Capacity
steel                         utilization   Average
product              2005 *)  2005 (%)      growth

Sponge iron           1,327          57.7    -2.50%
Steel slab            1,387            75     4.80%
Billet                1,730          36.2    17.20%
Concrete              2,002          45.5
reinforcing
iron/light profile                           16.70%
Wire rod                602          59.3     0.00%
HRC/Plate             2,143          68.9     2.70%
CRC/Sheet               722          53.5    -0.50%

Note: *) provisional

Source: Ministry of industry,  Data Consult

Table--9
Production of billet and reinforcement bars/light profile
by producers, 2003-2005

(Tons)

Companies                            2003      2004      2005

                                  Production of billet

Growth Sumatera Ind. Ltd, PT       64,301    62,436    63,369
Gunung Gahapi Sakti, PT           134,000   141,055   145,300
Gunung Garuda, PT (billet)         60,700    85,100    43,000
Gunung Garuda, PT (bloom)          90,100   110,250   145,200
Hanil Jaya Metal Works, PT        123,949   121,007   138,417
Inter World Steel Mill, PT        150,242   164,870    83,612
Inti General Yaja Steel, PT        36,629    40,250    53,561
Ispatindo, PT                     583,509   524,474   536,788
Jakarta Cakratunggal Steel, PT    198,000   204,000   223,400
Jatim Taman Steel, PT              84,074    93,300    71,660
Krakatau Steel, PT                326,056   386,500   356,300
Pangeran Karang Murni, PT         275,120   289,425   236,182

Production of Reinforcement bars/light profile by producers

PT. Gunung Gahapi Sakti           108,662    82,325    95,494
PT. Krakatau Wajatama             103,097   174,545   166,233
PT. Budidharma Jakarta               -         -       48,750
PT. Jakarta Cakra Tunggal         156,806   161,558   176,922
PT. The Master Steel              262,764   231,685   335,596
PT. Pulogadung Steel               45,500    37,690    53,965
PT. Toyogiri & Steel              108,000    93,600   108,000
PT. Jakarta Kyoei Steel           117,000   114,000   115,000
PT. Jatim Taman Steel              63,055    56,205    72,664
PT. Hanil Jaya Metal Works        120,706   120,117   132,917
PT. Inter World Steel Mill        181,947   198,383   119,124
Indonesia
PT. Gunung Garuda                  32,500    47,100    40,425

Source: Data Consult

Table--10
Import duties on flat steel products, 2005

                           Import
Products                  duty (%)

Upstream products

Iron ore                          0
Sponge                            0
Scrap                             0
Pellet                            0
Ferro Alloy                       0
Slab                              0
Slab Stainless                    0
Bloom/Ingot                       0
Billet                            0

Flat Products

Intermediate products

HRC                         5 & 7.5
Plate                       5 & 7.5
HRC Stainless                     0
CRC                       10 & 12.5
CRC Stainless                    10

Down Stream products

Tin Free Steel                   15
Tinplate                         15
Other coated Steel               15
Light profile                    20
Straight/spiral                  13
  welded pipe
Heavy profile                    20

Long Products

Intermediate Products

Seamless pipes                    5
Wire Rod                          5
Pc. Strand                  10 & 15
Pc. Wire                    10 & 15
Pc. Bar                     10 & 15
Free Cutting wire           10 & 15
Spokes Wire                 10 & 15
Bead wire                   10 & 15
Spring Wire                 10 & 15
Others                      10 & 15

Down stream products

Heavy profile                    20
Seamless pipes/Finished          15
Seamless pipe
Steel Cord                       20
Spiral spring                    15
Cord                        15 & 20
Nail                        15 & 20
Wire net/fence                   15
Chain and parts             15 & 20
Nut and bolt                15 & 20
Concrete reinforcing        15 & 20
  iron/light profile

Source: Finance ministry, industry ministry, Data Consult

Table--11
Imports of steel

(Tons)
(000'US$)

Description              2001        2002        2003

Total steel         6,119,052   6,439,896   6,024,606
                    1,547,041   1,695,143   1,738,433

1. Based iron/      3,065,665   2,900,725   2,688,990
  steel               256,722     238,614     240,850

Pellet              1,291,535   1,318,129   1,308,810
                       58,965      53,421      51,541

Sponge/ Pig Iron      298,007     184,720     319,284
                       37,982      24,454      41,801

Scrap               1,438,338   1,318,025     966,458
                      139,350     131,809     111,192

Ferro Alloy            37,784      79,852      94,437
                       20,425      28,930      36,316

2. Crude steel      1,089,251   1,295,902   1,148,630
                      190,806     227,925     266,041

Slab                  304,603     268,586     271,855
                       52,284      49,611      61,672

Bloom, Billet and     783,627   1,026,586     876,252
Ingot                 187,571     177,412     203,798

3. Flat steel       1,316,124   1,533,971   1,500,461
  product             591,792     688,663     718,173

Total HRC/P           730,816     804,236     890,537
                      176,802     242,114     810,710

HRC                   476,436     506,128     603,686
                      128,480     145,169     207,024

HRP                   125,901     152,940      79,827
                       48,322      62,809      36,449

Total CRC/S           448,428     664,408     654,101
                      191,286     576,132     582,854

CRC                   264,008     413,906     405,531
                      100,777     162,227     177,323

CRS                    83,644      88,275      71,248
                       42,036      44,249      36,614

Zinc plated iron      100,049      64,618      78,787
sheet                  36,524      30,013      43,514

Tin plated iron        89,933     106,523      70,756
sheet                  52,123      59,846      44,304

Other coated flat      62,888      69,052      71,015
steel                  41,917      44,907      50,395

4. Iron/steel bar     522,197     585,076     542,744
products              362,227     380,149     355,945

Wire rod              206,704     229,680     248,862
                       88,751      91,123     112,190

Steel wire             44,844      68,626      63,624
                       27,467      32,168      29,678

Stranded/woven         18,251      22,059      23,619
wire                   19,639      21,506      24,133

Concrete                  912         775         729
reinforcing iron          295         283         325

Heavy profile          43,293      36,805      15,383
                       15,393      13,298       6,590

Light profile          19,824      20,187      22,836
                       13,762       9,462      13,465

                                            Trend (%)
Description              2004        2005   2001-2005

Total steel         8,561,062   7,850,527        8.15
                    3,399,952   4,396,816       32.12

1. Based iron/      3,919,571   2,251,957       -3.11
  steel               661,050     523,206       27.67

Pellet              1,985,853     565,400      -11.68
                      140,541      47,451        5.47

Sponge/ Pig Iron      450,947     419,043       17.05
                      122,426     117,938       47.36

Scrap               1,399,510   1,202,108       -2.94
                      326,617     283,297       26.19

Ferro Alloy            83,261      65,407       12.07
                       71,466      74,520       41.81

2. Crude steel      1,706,892   1,750,013       13.02
                      717,992     765,953        48.1

Slab                  488,835     435,295       15.56
                      194,791     183,128       47.32

Bloom, Billet and   1,217,473   1,284,076       12.27
Ingot                 521,596     579,705       48.52

3. Flat steel       2,048,320   2,583,408        17.8
  product           1,239,025   1,865,097       33.42

Total HRC/P         1,411,573   1,696,648       20.18
                    1,260,664   1,452,543       41.72

HRC                   872,710     929,266       20.69
                      387,954     523,277       46.11

HRP                   150,909     244,106       14.01
                       85,903     156,797       30.57

Total CRC/S           825,835   1,109,460       15.72
                      729,062   1,017,404       28.81

CRC                   466,051     619,835       20.03
                      263,011     397,569        38.1

CRS                    96,773      92,056        2.88
                       63,081      87,237        19.9

Zinc plated iron      110,601      94,557        4.06
sheet                  74,728      79,600       28.02

Tin plated iron       124,784     132,090        4.34
sheet                 101,755     121,080       24.81

Other coated flat      93,661      96,712        9.71
steel                  77,654      85,485       21.81

4. Iron/steel bar     730,999   1,053,443       12.36
products              534,313     915,626       24.55

Wire rod              365,151     500,884       17.66
                      216,523     320,995       41.01

Steel wire            111,644     106,955       24.92
                       61,580      70,244       28.75

Stranded/woven         29,899      33,025       16.07
wire                   28,268      34,033       14.72

Concrete                  713      13,336        69.6
reinforcing iron          521       6,538       97.57

Heavy profile          22,403      47,594       -3.02
                       14,280      26,780       12.51

Light profile          21,523      37,275       14.19
                       14,857      25,718       18.55

Source: Data Consult

Table--12
Exports of steel products

(Tons)
(000' US$)

Description
                           2001        2002        2003

Total steel           1,129,668   1,134,712   1,194,673
                        450,872     476,362     577,996

1. Base steel            75,318      69,097      96,301
                         64,307      46,524      88,664

Pellet                       14         100         580
                          5,490          16          84

Sponger/Pig Iron          1,015       3,921      19,047
                          1,670       1,913       4,770

Scrap                    36,916      35,095      37,723
                         15,803      11,954      14,281

Ferro Alloy              37,372      29,981      38,923
                         46,829      32,640      69,529

2. Crude steel            4,405       4,780      14,476
                          1,561       3,911       5,734

Slab                         97         628       8,151
                            501         313       2,586

Bloom, Billet and         4,302       3,846       5,960
Ingot                     1,378       3,333       2,624

3. Flat iron/steel      483,743     616,647     781,346
products                151,105     218,955     298,753

Total HRC/P             328,895     478,831     593,588
                         89,112     285,519     444,894

HRC                      73,514     224,307     342,753
                         15,598      61,212     102,141

HRP                     239,783     193,312     148,694
                         57,350      45,322      49,206

Total CRC/S              91,333     133,540     158,424
                         88,456     125,139     150,463

CRC                      67,389      90,754     109,182
                         21,067      34,385      41,281

CRS                       2,878       8,400       7,961
                          1,527       6,347       2,615

Zinc plated              10,619      19,495      16,049
  flat steel              4,729      10,759       9,060

Tin plated                  425       1,215         345
  flat steel                362         925         217

Other coated flat         6,632      13,656      24,242
steel                     6,692      12,263      18,741

4. Iron/steel bar       484,471     390,120     247,446
products                163,084     142,510     108,086

Wire rod                274,105     249,070     168,786
                         64,358      61,614      50,579

Steel wire               33,679      23,564      19,198
                         16,079      13,395      14,249

Stranded/                22,589      25,526      14,124
  woven wire              9,565      11,867       9,968

Stranded/                22,589      25,526      14,124
  woven wire              9,565      11,867       9,968

Concrete                  1,381       1,419         715
  reinforcing iron          302         324         274
                         31,242      23,572      17,966
Heavy steel profile      10,480       7,498       7,158
                          8,605       3,957       6,436
Light steel               4,021       1,508       3,730
  profile

Description                                 Trend (%)
                         2004        2005   (2001-2005)

Total steel           145,971   1,427,811           7.4
                      882,576   1,028,897          25.4

1. Base steel         188,987     189,676          33.0
                      108,504     124,848          24.3

Pellet                 47,337         248        (17.2)
                        1,319          82        (33.1)

Sponger/Pig Iron       70,061      89,477         226.8
                       18,786       6,893          66.9

Scrap                  38,586      69,806          14.7
                       19,968      33,926          22.6

Ferro Alloy            33,004      30,392         (3.1)
                       68,432      84,027          21.0

2. Crude steel         19,002      12,797          42.1
                       12,304       5,960          46.6

Slab                   17,533      11,496        1343.2
                        7,921       4,141         739.1

Bloom, Billet and         652       1,283        (34.3)
Ingot                   3,114       1,730           4.0

3. Flat iron/steel        817          18        (22.4)
products              477,139     512,686          38.0

Total HRC/P           582,824     614,084          12.6
                      287,027     259,762          45.3

HRC                   194,834     176,795          13.1
                       92,193      82,967          45.5

HRP                   295,797     354,322          12.8
                      168,554     216,902          48.8

Total CRC/S           287,077     157,331          19.1
                      285,570     155,742          44.9

CRC                   182,134      96,305          15.2
                      103,436      59,437          37.4

CRS                     1,507       1,590        (25.2)
                        1,115       1,441        (16.9)

Zinc plated            36,724      38,393          37.8
  flat steel           15,447      25,269          53.1

Tin plated              1,561       5,315          70.0
  flat steel            1,351       1,887          44.5

Other coated flat      27,537      11,055          18.8
steel                  25,983      16,706          29.4

4. Iron/steel bar     366,986     370,869         (5.8)
products              195,885     255,913          13.0

Wire rod              265,203     190,519         (6.4)
                       95,696      76,342           8.1

Steel wire             18,400      24,908         (8.2)
                       17,787      24,949          12.3

Stranded/               9,957      11,732        (20.2)
  woven wire           12,944      19,526          16.4

Stranded/               9,957      11,732        (20.2)
  woven wire           12,944      19,526          16.4

Concrete                  215         438        (34.2)
  reinforcing iron         98         178        (20.1)

Heavy steel profile    28,887      43,035           8.8
                       18,222      23,068          28.0
Light steel             3,848         479        (44.0)
  profile 2,259           244      (40.5)

Source: BPS, Data Consult

Table--13
Volume of steel supply and demand,
2001 -2005

Description    2001    2002    2003    2004    2005

Sponge iron

Production    1,516   1,478   1,171   1,367   1,327
Exports           1       4      19      70      90
Imports         305     269     272     489     435
Consumption   1,820   1,743   1,424   1,786   1,673

Slab

Production    1,217   1,292   1,002   1,190   1,387
Exports           0       1       8      18      12
Imports         305     269     272     489     435
Consumption   1,522   1,560   1,266   1,661   1,811

Billet

Production      952     976   1,042   1,199   1,730
Exports           4       4       6       1       1
Imports         784   1,027     876   1,218   1,284
Consumption   1,731   1,999   1,912   2,416   3,013

Concrete reinforcing iron /Light profile

Production    1,113   1,141   1,212   1,424   2,002
Exports           9       4       6       4       1
Imports          20      20      23      22      37
Consumption   1,124   1,157   1,228   1,442   2,039

Wire rod

Production      610     625     578     651     602
Exports         274     249     169     265     191
Imports         207     230     249     365     501
Consumption     543     606     658     751     912

Hot Rolled Coil/Plate

Production    1,935   2,032   2,190   2,442   2,143
Exports         313     418     491     491     531
Imports         476     506     604     873     929
Consumption   2,098   2,121   2,302   2,824   2,541

CRC/Sheet

Production      745     755     680     754     722
Exports          70      99     117     184      98
Imports         348     502     477     563     712
Consumption   1,022   1,158   1,040   1,133   1,336

Source: Data Consult

Table--14
Prices of HR wide coil *) 2001-2006

                                    (US$/tons)
Year                USA   Germany     China

2001                273       242      269
2002                309       249      219
2003                339       350      236
2004                500       459      329
2005                539       601      553
2006 (up to June)   499       489      438

Note: *) Hot rolled wide coil (under 3 mm, un-pickled) Source: Iron and
Steel Statistics Bureau

Table--15
Retail prices of steel materials of PT KS in Jakarta, 2004-2006

Prices (Rp/Kg)

Year/Month   HRC    CRC    Wire Rod

2004
* Mar        5850   6400       5225
* June       5400   6150       4138
* Sept       6350   6475       5325
* Dec        6550   7125       5275

2005
* Mar        7150   8800       5350
* June       6915   8400       4730
* Sept       6600   7800       5140
* Dec        5625   6825       4855

2006
* Jan        5295   6500       4650
* Feb        5065   6200       4295
* Mar        5100   6200       4350
* Apr        5150   6225       4335

Note: Prices including VAT

Source: PT KS

Table--16
Production costs of HRC and CRC when fuel oil prices at Rp 5,800 per
liter

                  HRC production cost

       Description                Price per
                                unit (Rp./ton)

I.     Basic material
       Slab price                    4,544,242

II.    Production cost

       a. Indirect
       components :

       --Electricity 133 Kwh            73,416
       --Residue 19 liters             110,200
       --Oxygen 0,107 NM3                   32
       --Air 0,966 M3                      646
       --Gas 36 Nm3                     12,767
       --Direct salary                  23,480

       b. Direct component I:

       --Spare parts                    13,740
       Sub total                       234,281

III.   Fixed cost                      114,740
       1. Salary/wage                   11,740
       2. Depreciation                      --
       3. Maintenance                    6,000
       4. General cost                  97,000
       Total                         4,893,263

                  CRC production cost

       Description             Price per unit
                                  (Rp/ton)

I.     Basic material
       HRC price                    5,498,543

II.    Production cost

       a. Indirect
       components:

       --Electricity 103 Kwh           56,856
       --Residue 17 liters             98,600
       --Gas 14 NM3                     1,260
       --Packaging 0.965 m3            36,314
       --Air 0.862 m3                   1,604
       --Acid Hcl 3.5 tons              1,818

       --Lubricant oil                 34,104
       1.42 ton
       --Indirect salary               23,480
       b. Direct
       component:
       --Spare parts                   13,740
       Sub total                      267,776

III.   Fixed cost                     114,740
       1. Salary/wage                  11,740
       2. Depreciation                     --
       3. Maintenance                   6,000
       4. General cost                 97,000
       Total                        5,881,059

Source: Data Consult

Table--17
Planned construction of new and expansion of steel factories
based on licenses issued by BKPM, 2005-2006

Name/Status           Location       Capacity                ton/year

2005

NASIONAL              Mojokerto,     Concrete                  36,000
INTERINDO METAL,      East Java      reinforcing iron          15,000
PT/PMA, new China                    Angle iron

JIFLE STEEL           Serang,        Rolled steel bars         24,000
INDUSTRY              Banten         Nail of iron steel         3,000
COMPANY, PT/PMA,
new, China

HWA LIEN STEEL        Tangerang,     Steel                     36,000
FACTORY, PT/PMA,      Banten
new, China

JAKARTA CENTRAL       East Jakarta   Rolled steel bars        400,000
ASIA STEEL, PT/PMA,                  Nail of iron steel        50,000
new, China                           Nuts and bots of
                                     iron steel                50,000

PETRA STEEL,          Tangerang,     Hot rolled slit coil      24,000
PT/PMA,               Banten         Cold rolled slit coil     24,000
new, Malaysia                        Pipe                      10,000
                                     Angel bar                  1,000

TJING KWO STEEL       Bekasi,        Concrete                     300
INDUSTRY, PT/PMA,     West Java      reinforcing iron             300
new, China                           Concrete                     300
                                     reinforcing iron
                                     spiral
                                     Angle iron

PAN PACIFIC           Tangerang,     Steel billet              30,000
INDOTAMA, PT/PMA,     Banten
new, China

2006

TAMSON METAL, PT/     Tangerang,     Wire rod                  12,500
PMA, new, China       Banten         Square bar Round          12,500
                                     bar                       12,500
                                     Angle bar                 12,500

INTER WORLD STEEL     Tangerang,     Billet                    65,000
MILLS INDONESIA,      Banten         Concrete                  80,000
PT/PMA, expansion                    reinforcing iron

INDONESIA STEEL       Semarang,      Pipes and steel           48,000
TUBE WORKS,           Central Java   tubes
PT/PMA expansion

Name/Status           Investment

2005

NASIONAL              US$ 4.800.000
INTERINDO METAL,
PT/PMA, new China

JIFLE STEEL           US$ 6,400,000
INDUSTRY
COMPANY, PT/PMA,
new, China

HWA LIEN STEEL        US$ 4,000,000
FACTORY, PT/PMA,
new, China

JAKARTA CENTRAL       US$ 36,600,000
ASIA STEEL, PT/PMA,
new, China

PETRA STEEL,          US$ 1,200,000
PT/PMA,
new, Malaysia

TJING KWO STEEL       US$ 400,000
INDUSTRY, PT/PMA,
new, China

PAN PACIFIC           US$ 2,500,000
INDOTAMA, PT/PMA,
new, China

2006

TAMSON METAL, PT/     US$ 500,000
PMA, new, China

INTER WORLD STEEL     RP. 50 billion
MILLS INDONESIA,
PT/PMA, expansion

INDONESIA STEEL       US$ 12,000,000
TUBE WORKS,
PT/PMA expansion

Source: Data Consult, BKPM

Table--18
Projection of steel requirement, 2006-2010

(000 tons)

                       Prod.                Projected demands
Types of steel         Capacity
products               2005       2006    2007    2008    2009    2010

Long Products
Billet                 4,785      3,481   4,022   4,647   5,369   6,204
Concrete reinforcing
iron/Light profile     4,400      2,385   2,789   3,262   3,816   4,463
Wire Rod               1,015      1,040   1,185   1,351   1,540   1,755

Flat Products
Slab                   1,850      1,919   2,034   2,155   2,284   2,421
HRC/Plate              2,200      2,683   2,832   2,990   3,157   3,333
CRC/S                  1,350      1,436   1,544   1,659   1,783   1,917

Source: Data Consult/ICN
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Publication:Indonesian Commercial Newsletter
Article Type:Industry overview
Geographic Code:9INDO
Date:Jul 1, 2006
Words:11937
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