On February 10, the Indonesian House of Representatives' (DPR) Commission XI on energy affairs, in a meeting with the Indonesia Iron and Steel Industry Association (IISIA), asked the government to increase steel import duty to protect the domestic steel industry and prevent further layoffs in the sector.
"It is the obligation of the government to protect the steel industry at home from imported steel products and prevent massive layoffs. Imported steel products have now posed a big problem in the domestic market," said Commission XI chairman Hafiz Zanawi.
According to Mr. Zanawi, the stimulus packages offered by the government to protect the real sector, particularly those for the steel industry were not yet sufficient.
Mr. Zanawi stated that the steel industry at home could not survive with only a stimulus in the form of income tax cuts, adding that increased import duty would be more effective.
Declining to recommend a figure for the import duty tariff, the legislator stated, "We have to discuss it first with the steel industry associations."
It is estimated that in 2008 Indonesia's steel imports totaled 1.5 million mt while its domestic need for steel was an estimated 6 million mt.
In the meantime, IISIA executive director Hidayat Triseputro said that Indonesia`s steel production in 2006 was 5.3 million mt while in 2009 it would projected at only two million mt unless the government changed its policy on steel production.