Making the Best of Indonesia’s 2021 Economic Outlook

The COVID-19 pandemic has ripped through Indonesia’s economy in 2020. With the country’s GDP shrinking for the fourth straight quarter following the release of Q1 2021 data, it is evident that Indonesia still has a long way to go on the road of recovery. Furthermore, economists predict that new COVID-19 variants could lead to a shortfall of this year’s growth targets by as much as 5.3 %.

 

Throughout the pandemic, the steel industry has faced several complex challenges due to government-imposed large-scale social restrictions, also known as Pembatasan Sosial Berskala Besar di Indonesia (PSBB). Impacted by the downturn in buying power from the general community and the halting of numerous major construction projects, steelmakers faced significant challenges.

 

Yet, Kimin Tanoto, the Commissioner of Gunung Raja Paksi (GRP), believes there are fresh opportunities that could signal a positive change in direction.

 

He explains, “Many infrastructure projects were delayed, which have also affected our business as a steel industry. We took this opportunity to take a deep dive into our business strategy and to streamline our product mix and operating costs, paving the way to a much stronger and leaner organisation.”

Poised For Growth

While the pandemic has undoubtedly presented a serious cause for concern, the metal industry as a whole is still expected to grow substantially in the lead up to 2030. With many companies undergoing a major restructuring process to recover from the economic impact of COVID-19, the Metal Market Report from January 2021 predicts that the near future looks bright, with the global industry expected to reach $4619.74 billion in 2025 at a CAGR of 7%.

 

The local Indonesian market also has the potential to bounce back strongly, considering the rapidly growing demand for nickel from major global suppliers and industry giants. As Indonesia has recently overtaken China as the world’s leading refined nickel producer, the rise of electric vehicles, which require nickel for their batteries, could see the establishment of a highly profitable domestic battery supply chain.

Kimin Tanoto & GRP Shaping Tomorrow

Continuing to Break the Status Quo

As Kimin Tanoto and GRP make the most of current circumstances and continue growing the business, environmental sustainability remains at the top of the agenda. This is why the company continues to implement a myriad of green initiatives, including making a commitment to strive towards “Net-Zero” emissions by assessing its decarbonisation potential and establishing milestones that they can achieve while on the path towards producing green metal.

 

Kimin Tanoto is also keenly focused on the decarbonisation of steel, with shifting customer expectations leading to the development of carbon-friendly steel products. As governments and companies around the globe look to quickly reduce their carbon emissions,  a raft of new technologies are bringing about improvements to blast furnace efficiency and carbon capture techniques.