INDUSTRY.co.id - Jakarta, The national steel industry requires a total investment of US $ 14 billion to 2025. The investment is needed to build a smelter facility for the steel industry with a total capacity of 14 million tons.

"The need for crude steel in the next 10 years nearly doubled to 19.12 million tons. To meet the demand, investment is needed for a new smelter construction with a total value of US $ 14 billion, "said Head of Sub-Directorate of Non-Fero Metals Industry at the Ministry of Industry Andi Rizaldi in Jakarta, Friday (5/17/2018).

Andi said, the increase in steel production capacity will be done gradually. In 2015, the plant owned by PT Krakatau Posco is planned to start production with a capacity of 3 million tons of crude steel.

In addition, he continued, there will be an increase in production capacity from a factory owned by PT Krakatau Steel for 1 million tons of crude steel. These two additions will increase domestic production capacity to 10.84 million tons.

In 2020, added Andi, there will be additional capacity of 4 million tons. This additional capacity comes from the expansion of the second phase of Krakatau Posco (3 million tons) and the processing of products produced by PT Jogja Magasa Iron (1 million tons).

"In 2025, it is targeted to add 6 million tons of production to meet the demand of crude steel which is estimated to reach 19.12 million tons," he said.

Andi continued, it asked the steel producers to optimize the use of domestic raw materials in meeting the demand for steel in the domestic market. At least, 250 million tons of iron ore raw materials and iron sand is required to reach 110 million tons to meet demand for steel products by 2025.

"Meanwhile, the total energy needs to build a smelter facility for the iron industry with a total capacity of 14 million tons in 2025 is 1,174 megawatts," explained Andi.

According to Andi, the steel industry in Indonesia still promises quite high growth. This can be seen from the per capita consumption of steel is still low.

The same thing was expressed by Vice President of Head of Market Research & Development of PT Krakatau Steel Tbk Bimakarsa Wijaya which revealed that Indonesia's per capita steel consumption is relatively low compared to other countries in Asia.

"In 2013, Indonesia's steel consumption is only 52 kilograms (kg) per capita, far below Thailand's 253 kg per capita, Malaysia 330 kg per capita and Singapore 879 kg per capita," he said.

According to Bimakarsa, national steel needs will continue to increase, and dependence on imported products is also higher. The domestic steel industry must grow and develop so that dependence on imported products can be reduced.

Based on data from the Ministry of Industry, the value of imports of steel products in 2013 reached US $ 12.59 billion, higher than the export value of only US $ 1.91 billion.

Meanwhile, the utilization of this industry is still quite low, in the range of 68%. Recorded, the number of steel companies operating in Indonesia in 2013 as many as 352 companies, with a workforce of 114,596 people.

According to Bima, the industry recorded a fairly high growth in 2013, ie as much as 10.74%. The total investment coming in 2013 amounted to Rp 55.8 trillion. A total of US $ 3.57 billion in the form of foreign investment (PMA) and Rp 21.89 trillion in the form of domestic investment (PMDN).

"The steel industry is a strategic industry and is a national resilience industry, given its role and function in supporting the construction industry - infrastructure, manufacturing and defense," Bimakarsa said.

He predicts, Indonesia will become the largest Asean steel market, given the level of economic growth, geography, and infrastructure. National interest (national interest) to the national steel industry needs to get more attention, given the growing conditions and global competition today.

Bimakarsa added that the road map of the growth of the national steel industry must take into account the fundamental structure, projected supply demand, capacity, and technology.

"The development of the domestic steel industry should be directed to be more aimed at meeting the needs of the domestic market. Steel consumption in 2020 is expected to increase to 84-100 kg per capita, "he closed.