The President: BUMN Must Continue Its Transformation

BUMN must continue its transformation

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BUMN must continue its transformation
President Joko Widodo visited and inaugurated the Hot Strip Mill #2 Factory of PT Krakatau Steel (Persero) Tbk in Cilegon City, Banten Province, Tuesday (9/21).

IO – Indonesian President Joko Widodo (Jokowi) emphasized that the transformation of state-owned enterprises (SOEs) must proceed, despite the current COVID-19 pandemic, a message he conveyed at the inauguration of Hot Strip Mill #2 of PT Krakatau Steel (Persero) Tbk, Tuesday (9/21).

“The transformation of SOEs is a must, so that they could become world-class SOEs, more professional, competitive and lucrative, to provide better services to the community, and open up more job opportunities in our country, as well as making a higher contribution to state revenue,” he said.

The President devoted much attention to the transformation and restructuring carried out by PT Krakatau Steel, the state-owned steel enterprise in Indonesia. “Krakatau Steel has now become healthier. Its production has become more regular. It is a highly strategic industry; that’s why I pay close attention to the steel industry,” he said.

The steel products of Krakatau Steel, he added, are essential for domestic use. For the past five years, the demand for steel in Indonesia has increased significantly, by 40%, catalyzed by infrastructure development and other industries, especially the automotive industry. With that impressive figure, the President urged the national steel industry to not allow foreign products to seize the opportunity. 

With a new factory being fully operational, the President expects that domestic steel demand can be fulfilled and dependence on imported steel will be simultaneously eliminated. “Our country’s steel imports are currently ranked second for Indonesia’s imported commodities. So we hope that later we can save Rp 29 trillion per year in foreign exchange, which is a very large number,” he said.

On that occasion, he also expects Krakatau Steel to maintain the quality of the steel products to have a competitive edge over imported products, so that in the future they could compete in regional and global markets. 

Furthermore, Jokowi asked the related ministries to show continuous support for the national iron and steel industry. “Support our SOEs to become professional and profitable so the industrial clusters of 10 million tons of steel in Cilegon that have been targeted can be realized in 2025,” he explained.

Meanwhile, SOE Minister Erick Thohir said, as directed by President Jokowi, he will proceed with the transformation and restructuring of SOEs, so they can make a major contribution to society and the country. The endeavor starts from the establishment of SOE’s holding and sub-holding to the formation of strategic industrial clusters. In 2020, SOEs were able to generate profits of Rp 375 trillion. “Amid the Covid-19 pandemic, we are trying to increase this gradually. But the most important thing is, as emphasized by the President, how to continuously improve public services,” concluded Erick. (eka)