Remarks of President of the Republic of Indonesia at the Inauguration of Steel Industry Factory PT Krakatau Steel, 21 September 2021, in Cilegon City, Banten Province

Bismillahirrahmanirrahim.

Assalamu’alaikum warahmatullahi wabarakatuh.

Good afternoon,

Peace and prosperity be upon us.

Honorable Speaker of the House of Representatives Puan Maharani;

His Excellency Ambassador of the Republic of Korea to Indonesia Park Taesung;

Honorable Leaders and Members of the House of Representatives;

Honorable Ministers of the Indonesia Onward Cabinet;

Honorable Governor of Banten and Mayor of Cilegon;

Honorable President Director, Board of Directors, and Board of Commissioners of PT Krakatau Steel Group;

Distinguished Guests.

Even during this pandemic, we still have to realize SOEs transformation. Previously, Minister of SOEs Erick Thohir has explained the formation of holding and sub-holding as well as the formation of strategic industrial clusters. I think the explanation is simple and prompt. And, we all know the direction.

The SOEs transformation is a must so that our SOEs will become world-class SOEs, which are more professional, competitive, and profitable, will provide better services to the community, will open more job opportunities in our country, and will contribute more to state revenue.

PT Krakatau Steel also continues to transform and restructure. Minister of SOEs has said that Krakatau Steel is now getting healthier because previously, it was not. Production is also getting smoother. This industry is very strategic; therefore, I pay great attention to this steel industry.

The end products are very needed and utilized by other industries. It means that later, we will slow down our imports from other countries. It is also one of the important pillars to spur Indonesia’s economic growth because our steel consumption is huge. Because we know that our steel consumption is huge, we should not let imported products take charge. Our needs continue to increase from year to year, not only because of infrastructure development, but also the development of other industries, which will also require steel, especially the automotive industry.

And over the last five years, our steel needs have increased by 40 percent. The President Director has said it earlier. This is driven by our infrastructure development.

Ladies and Gentlemen,

Today, we will witness the inauguration of Hot Strip Mill #2 of PT Krakatau Steel which uses the modern and latest technology in the steel industry. There are only two in the world, the first is in the United States and the second is in Indonesia, namely in Krakatau Steel. Earlier, I have inspected the production process and it really uses high technology. This factory has a hot-rolled coil (HRC) production capacity of 1.5 million tons per year. This is the first factory in Indonesia capable of producing premium quality HRC. We will continue to increase the production until it reaches four million tons per year.

With the operation of this factory, we will be able to meet the domestic steel needs, so there will be no more imports as we do now, this is our hope. So that, once again, it will push down our import on steel which ranks second for Indonesia’s imported commodities. So, we hope that later we can save foreign exchange of Rp29 trillion per year, this is a very large number.

I want the quality of the products produced to be not inferior to imported products, so we can meet the needs of our country’s industries. And, I am sure that in the future, it will become a commodity that can compete in regional and global markets.

I entrust the Ministers to continue to support the steel and iron industry players, to support our SOEs to become more professional and profitable in order to realize the 10-million-ton steel industry cluster in Cilegon, which is aimed to be completed by 2025.

This concludes my remarks and by saying bismillahirrahmanirrahim, I inaugurate the Hot Strip Mill #2 of PT Krakatau Steel.

I thank you.

Wassalamu’alaikum warahmatullahi wabarakatuh. (FI/MMB)