The steel industry is one of the strategic sectors or is referred to as the “mother of industries” because it plays an important role in supplying raw material needs for many other industrial sectors. Among them are the construction sector, transportation equipment, heavy equipment, electronics, and defense equipment.

“Through the application of industry 4.0 in Indonesia, the steel industry in the country must be able to become a leader in innovation and increase the ability to meet basic materials for industrial users. That way, we can have higher competitiveness compared to products produced by other countries,” said Minister of Industry Agus Gumiwang Kartasasmita at the PT. Gunung Raja Paksi Tbk (GRP) in West Cikarang, Monday (21/3).

The Minister of Industry said that after going through various waves and variants of the Covid-19 pandemic, the base metal industry managed to record positive growth in the fourth quarter of 2021 by 11.31%, up from 9.52% in the previous quarter. “The growth of this sector is higher than the average growth of the national industry. I give my appreciation to all steel industry players in the country,” he said.

The Minister of Industry revealed that the contribution of the industrial sector to the economy can be seen from three things. First, expansion through increased investment. “We saw PT Gunung Raja Paksi Tbk. has increased investment, one of which is a light section mill (NGO) which is expected to start production in April this year and a new blast furnace operation in September,” he explained.

The second contribution is through exports which bring in foreign exchange for the nation and state. “GRP conveyed its plan to increase the export portion to 20 percent by 2022,” said the Minister of Industry.

Third, deepening of industrial structure. The Minister of Industry hopes that all steel industries can immediately deepen the structure, participate in building and fulfill the steel supply chain, from upstream, so as to produce cheap and quality raw materials.

Fulfillment of upstream products as raw materials to downstream products that are high in innovation, must be fulfilled in the harmonization of national steel supply-demand. “For this reason, the government has drawn up a national industrial development policy in accordance with the 2015-2035 National Industrial Development Master Plan (RIPIN), which is currently entering the second phase of 2020-2024 with a national steel capacity target of 17 million tons,” he said.

Through the realization of massive investments made by a number of companies, the government is optimistic that the target for increasing the capacity of the national steel industry can reach 11.9 million tons. This is also supported by the 10 Million Ton Steel Cluster Project in Cilegon – Banten which is expected to bring a multiplier effect, not only in terms of labor, but also tax revenue, and contribution to national GDP.

In addition, the industry also contributes through more environmentally friendly production processes. We appreciate that PT GRP has started buying carbon credits as part of its commitment to the world, that efforts to protect the environment are inseparable from the industry,” explained the Minister of Industry.

Steel exports to the United States

GRP exports structural steel to Casa Grande, Arizona-United States. Precisely to the electric car industry company, Lucid Motors. On this occasion, the Minister of Industry released the export of 700 MT structural beam products worth USD 1 million. “To export to the United States, adequate certification is needed. The products sent today have met the certificates from several international agencies which are not easy to obtain. It is an honor for us that the Children of the Nation can do that,” said the Minister of Industry.

President Director of PT Gunung Raja Paksi Tbk. Abednedju Giovano Warani Sangkaeng said that this was a trial order for the construction of the Lucid Motors factory. According to him, this export indicates that domestic steel products have succeeded in penetrating the export market to the USA.

The steel shipment to Uncle Sam’s country is the company’s effort to achieve the 2022 export target of USD 70 million. In addition, to increase the export portion to 20 percent, compared to 2021 which is only 5 percent. In 2021 alone, the export value achieved by the GRP will reach USD 44 million.

PT. GRP, which was established in 1970, is one of the steel companies that has a strategic role in the development of the national steel industry. This is indicated by the realization of the investment of PT. The GRP until 2021 is USD488.71 million (approximately Rp7 trillion) by producing steel from upstream to downstream. In addition to domestic sales, PT. GRP has exported with a value of USD45 million or an increase compared to 2020 which reached USD28 million.