McDermott has to pay more for its imported steels
Saturday, July 15 2000 - 04:00 AM WIB
McDermott Indonesia will have to pay more prices for steel pipes it imports from Japan for its 485-kilometer piping to transport gas from Natuna gas field in Riau to Singapore following the government decision on Friday to impose countervailing duties for steel imported from Japan and Singapore.
McDermott, the winner of a government tender to build the gas-piping project, has appointed Marubeni to supply 150,000 steel pipes for the project. McDermott did not involve any local company to supply the pipes.
A number of local steel producers lost in the tender to supply pipes for McDermott gas piping project took their case to the Indonesian Anti Dumping Committee, accusing Japanese companies of dumping its steel products in Indonesia.
The companies filing the anti-dumping case are PT South East Asia Pipe Industries (SEAPI), PT KHI Pipe Industries, and PT Bumi Karya Steel.
According to Aburizal Bakrie, owner of SEAPI and PT Bakire Pipe Industries and also chairman of the Indonesian Chamber of Commerce and Industry, Japan offers its steel pipes at US$539 per ton. At the same time, the prices of steel pipes in Japan's domestic market stands at 170,000 yen or U$1,400 per ton.
Therefore, Aburizal and local steel producers suspect that Japanese firms conducted dumping practices in the sale of steel pipes to McDermott.
The Indonesian government hears the complains from local pipe producers, and on Friday imposed countervailing duties of between 5 percent to 81 percent for welded pipes from Japan and Singapore.
Based on finance minister decree No. 282/KMK.05/2000, the countervailing duties has been made affective since July 12, and at the same time, the government is still probing the dumping allegations.
The countervailing duties are imposed on Kawasaki with 12 percent duty, Marubeni (51 percent), Nippon Steel (5 percent), NKK (81 percent), Sumitomo (54 percent and other companies (81 percent). And the government imposes 78 percent countervailing duty for all Singapore companies supplying steel pipes to Indonesia. (*)