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Indonesia loses Rp3.35tn yearly from illegal steel imports: Krakatau Steel

Tempo - July 29, 2022

Riani Sanusi Putri, Jakarta – Commercial Director of state-owned steel maker Krakatau Steel, Melati Sarnita, responded to issues about illegal steel imports brought up by Trade Minister Zulkifli Hasan. She acknowledged that many business actors committed the illicit practice which caused major negative impacts on the performance of the national steel industry.

"There were many indications that steel is imported in unfair ways, such as dumping and circumvention (avoiding import tariffs)," said Melati when contacted by Tempo on Wednesday, July 27, 2022.

Melati, who is also the head of the Flat Product Cluster at the Indonesian Iron and Steel Association (IISIA), explained that illegal steel imports surely caused state losses as entrepreneurs avoided import duties.

Based on the Statistics Indonesia's (BPS) data, she mentioned that the potential state loss could reach US$225.7 million or equal to Rp3.35 trillion per year with an assumed exchange rate of Rp14,850 per US Dollar. The value was obtained by multiplying the import value of US$1.5 billion with the import duties under the Most Favored Nations (MFN) rules of 15 percent.

Previously, Trade Minister Zulkifli Hasan stated that his side was preparing measures to eradicate the practice of illegal steel imports. "Wait for the date, we will take down some illegal steel actors!" he said after seeing off the Gunung Raja Paksi's (GRP) steel exports to New Zealand in Bekasi, Wednesday, July 26, 2022.

However, Zulkifli stopped short of detailing the perpetrators to be investigated and how much the state lost from the illegal practice of steel imports.

Source: https://en.tempo.co/read/1617070/indonesia-loses-rp3-35tn-yearly-from-illegal-steel-imports-krakatau-stee