Ministry of Industry Reminds Krakatau Osaka Steel to Fulfill Employee Rights

The Ministry of Industry has confirmed the impending closure of PT Krakatau Osaka Steel (KOS), a significant development signaling the harsh realities faced by Indonesia's domestic steel sector. KOS is set to halt production by the end of April and shutter all operations by June, a decision stemming from a confluence of adverse global economic factors.

“

Therefore, we urge the company to fulfill the rights of affected workers in accordance with laws and regulations.

According to the Ministry's spokesperson, Febri Hendri Antoni Arief, KOS has been grappling with declining performance since 2022. The company's struggles are attributed to intense global competition, characterized by oversupply, a flood of cheap imported products, and a subsequent weakening of domestic purchasing power. This challenging environment has put Indonesian steel producers, who are committed to quality, in a difficult position against lower-priced international competitors, particularly from China.

“

KOS is one of the companies experiencing declining performance due to direct impacts of global pressure in the form of oversupply at the global level, floods of cheap imported products, and weakening purchasing power.

The Ministry acknowledges that the situation necessitates a strengthening of policies to protect and develop the national steel industry. "We will conduct a comprehensive study to formulate more effective strategies to maintain the sustainability of the domestic steel industry," stated Febri. This includes reinforcing import control policies, expanding mandatory SNI (Indonesian National Standard) implementation, and promoting the use of domestic products.

“

The situation is further exacerbated by the weakening domestic demand, especially from the construction sector.

Globally, the steel industry faces oversupply and low-price dumping, prompting various protectionist measures from other nations, such as import tariffs. Indonesia, through the Ministry of Industry, is committed to enhancing the competitiveness of its domestic steel sector, recognizing that this requires a concerted effort from the government, industry players, and the public. The closure of KOS serves as a stark reminder of the vulnerabilities within the national industry and the urgent need for strategic interventions.

“

We will conduct a comprehensive study to formulate more effective strategies to maintain the sustainability of the domestic steel industry.