INDUSTRY.co.id - Jakarta - The Minister of Industry (Menperin) Airlangga Hartarto said Indonesia will produce stainless steel products reaching four million tons by 2019. With that amount, Indonesia will be the second largest producer in the world or equivalent to production in Europe.

"The target will be achieved from Morowali industrial area, Central Sulawesi, which this year produces two million tons of stainless steel," Airlangga said at the opening of Seminar on Mining and Energy Expo 2017 in Jakarta, Tuesday (26/09/2017).

The increase in production capacity is due to the realization of the investment of several nickel-based smelting and processing industries in the industrial estate.

Ministry of Industry (Kemenperin) noted, the industrial area of ​​Morowali with an area of ​​2,000 hectares will attract investment of USD6 billion or reach Rp80 trillion by absorbing direct labor of about 26 thousand people and indirectly as much as 80 thousand people until 2019.

Currently, there are 10 companies already operating in industrial areas managed by PT Indonesia Morowali Industrial Park (IMIP).

In addition to the stainless steel expansion plan, Menperin also said that in an industrial area whose development is the result of cooperation between Bintang Delapan Group from Indonesia with Tsingshan Group from China, it will target the production of carbon steel to reach 3.5 million tons per year.

The carbon steel plant is projected to cost an investment of US $ 980 million. However, the value could grow to US $ 1.3 billion if coupled with power plants. The project will be built by PT Dexin Steel Indonesia, a joint venture between Delong Holding Limited with Shanghai Decent and IMIP.

According to Minister of Industry, besides proposing a development permit to the Investment Coordinating Board (BKPM), the company is also requesting tax holiday facility considering that it is a pioneer industry sector and its investment value is big.

"They will produce carbon steel based blast furnace. Derivative products will be partly for long product, "he said.

With a carbon steel production capacity of 3.5 million tons per year, the plant will reduce steel imports to meet domestic demand. Kemenperin noted, the national steel demand last year reached 12.94 million tons per year, while domestic producers only able to meet the amount of 6.8 million tons.

The carbon steel products will be similar to those produced by PT Krakatau Steel (Persero) Tbk. So the cluster of the new steel plant is called Krakatau Steel (KS) volume II.

Meanwhile, KS with Korean steel company Posco and Nippon Steel and Osaka Steel from Japan agreed to work together to build steel clusters of steel in Cilegon, Banten, which will produce 10 million tons of steel by 2025.

With that target, Indonesia soon has a large steel capacity in moving towards an independent state of steel imports. In addition, it is able to provide multiplier effects for the national economy through job creation and value-added reminder in the country.