ASSOCIATION OF STEEL INDUSTRIES CALLS FOR TIGHT SNI IMPLEMENTATION

Jakarta, Aug 5 (ANTARA) - The general chairman of the Indonesian Iron Steel Industries (IISA), Fazwar Bujang, has called for a tight implementation of the Indonesia National Standard (SNI) to make the industry highly competitive.

He made the statement at a roundtable discussion held by the Indonesian Chamber of Commerce and Industry (Kadin) at Four Seasons Hotel here on Tuesday.

Fazwar said many steel products produced by industries in the country failed to meet the SNI requirements so that they lacked competitiveness.

Because of this condition, steel industries in the country did not grow as expected because the industries were merely after short-term profits at the expense of long-term business continuity.

He said their low quality products had made imported products from various countries to enter the country freely.

He said supervision on the SNI implementation was urgent not only for the survival of the industries but also for protecting customers and domestic construction industry.

Another issue which is also crucial for development of the industries in the country is electricity supply. He said the minimum supply of electricity had made the industries to import iron ore from abroad.

Fazwar said Indonesia was not rich in iron ore reserves as had been presumed.

"Our iron ore deposits are not as big as has been told moreover the deposit in just one location," he said.

He said a deposit of 50 million tons in one location had been considered very large.

He said the locations of the iron ore reserves spread in various regions while the type of the ore varied so that various and expensive technologies would be needed to process them into steel raw materials.

The condition in Brazil is different, where the deposit is found in one location and reaching 500 million tons and is of a primary type namely which requires an easier process and has a high quality.

"In view of that it is not wrong that Indonesia until now still imports iron ore which is good from its origin," he said.

Fazwar said an integrated identification of strategic locations was needed for steel industry development.

Right now he said the only strategic location for development from upstream to downstream was Cilegon because its area was wide, its port and electricity were adequate.

He said the policy for national industry development was not clear and consistent while regulations were not available to regulate exploration and exploitation of natural resources.

Until 2008 the number of steel industries in the country reach 302 up from 273 in 2004.

The industries absorb up to 84,208 workers with their investment reaching Rp33.56 trillion.

The value of their exports meanwhile reached US$2.4 million in 2008 while their imports were worth US$10.3 million.