ID :
46511
Thu, 02/19/2009 - 19:39
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https://www.oananews.org//node/46511
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KRAKATAU STEEL`S SALES PREDICTED TO DROP IN 2009
Jakarta, Feb 19 (ANTARA) - PT Krakatau Steel Tbk's sales are predicted to drop by 20.25 percent to Rp15.8 trillion this year from around Rp19 trillion last year, chief commissioner, Taufiqurrahman Ruki, said after a shareholders' meeting here on Thursday.
Flanked by the company's president director, Fazwar Bujang, he said the drop in the steel sales this year was among others caused by small absorption from the domestic market and decreasing exports as a result of weakening global and regional economy as well as limited liquidity in the financial sector.
Other factors contributing to the decline of the company's sales were rising interest, weakening capital market and rupiah exchange rate against the US dollar and rising inflation, he said.
He said the domestic economic growth which was projected at only 4.5 percent would reduce growth in the construction, infrastructure and manufacturing sectors that had so far contributed the biggest to steel demand growth.
Krakatau also predicted that the increasing stock of steel products abroad had risen supply of illegal steel to cause the domestic price of the product to drop.
Ruki said in 2008 the company was able to book an unaudited profit of Rp462.5 billion which was an increase of 47 percent from 2007.
During 2008 its production of particularly slabs and billets reached 1.6 million tons.
Fazwar Bujang meanwhile said last year the price of steel continued to increase from first to third quarter making the price of pellets, pig iron, scarp and semi-finished products such as sponge, slab and fillet to rise and simultaneously followed by an increase in the buying price of raw materials for steel industry.
"Entering the fourth quarter of 2008 the price dropped sharply as a result of oil price slump and global financial crisis triggering reduction in steel demand and the weakening of consumers' purchasing power," he said.
He said in 2009 the company's production was expected to at leaast equal last year's volume although it would also be adjusted to demand.
On the current global economic crisis that could threaten manufacturing industry as well as steel and supporting industries Fazwar said it would certainly affect steel company operations.
In connection with it he appealed to the government not to be protectionistic but must take measures that side with the industry and the people particularly workers such as "continuing infrastructure development and requesting use of domestic products as long as the industries concerned are still capable of producing the components in demand."
The government, Ruki said, must also implement import regulations for certain products based upon reciprocality including an imposition of import tariffs and other requirements for import license application such as recommendations from producers and association of producers.
"The government must also issue a stimulus policy for the steel industry and steel-based manufacturing industries and act firmly against illegal imports of steel products and steel-based products," he said.
He said he believed if the call was heeded a conducive climate would be created and lay-offs prevented.
Flanked by the company's president director, Fazwar Bujang, he said the drop in the steel sales this year was among others caused by small absorption from the domestic market and decreasing exports as a result of weakening global and regional economy as well as limited liquidity in the financial sector.
Other factors contributing to the decline of the company's sales were rising interest, weakening capital market and rupiah exchange rate against the US dollar and rising inflation, he said.
He said the domestic economic growth which was projected at only 4.5 percent would reduce growth in the construction, infrastructure and manufacturing sectors that had so far contributed the biggest to steel demand growth.
Krakatau also predicted that the increasing stock of steel products abroad had risen supply of illegal steel to cause the domestic price of the product to drop.
Ruki said in 2008 the company was able to book an unaudited profit of Rp462.5 billion which was an increase of 47 percent from 2007.
During 2008 its production of particularly slabs and billets reached 1.6 million tons.
Fazwar Bujang meanwhile said last year the price of steel continued to increase from first to third quarter making the price of pellets, pig iron, scarp and semi-finished products such as sponge, slab and fillet to rise and simultaneously followed by an increase in the buying price of raw materials for steel industry.
"Entering the fourth quarter of 2008 the price dropped sharply as a result of oil price slump and global financial crisis triggering reduction in steel demand and the weakening of consumers' purchasing power," he said.
He said in 2009 the company's production was expected to at leaast equal last year's volume although it would also be adjusted to demand.
On the current global economic crisis that could threaten manufacturing industry as well as steel and supporting industries Fazwar said it would certainly affect steel company operations.
In connection with it he appealed to the government not to be protectionistic but must take measures that side with the industry and the people particularly workers such as "continuing infrastructure development and requesting use of domestic products as long as the industries concerned are still capable of producing the components in demand."
The government, Ruki said, must also implement import regulations for certain products based upon reciprocality including an imposition of import tariffs and other requirements for import license application such as recommendations from producers and association of producers.
"The government must also issue a stimulus policy for the steel industry and steel-based manufacturing industries and act firmly against illegal imports of steel products and steel-based products," he said.
He said he believed if the call was heeded a conducive climate would be created and lay-offs prevented.
