Challenging the Chinese
    Category: MP3EI Coverage By : Ulisari Eslita Read : 2732 Date : Sunday, May 12, 2013 - 16:00:58

    Courtesy of Indoferro

    In under a decade, nickel pig iron (NPI) has transformed the world's nickel industry. NPI was developed first in China and is a cheap alternative to make stainless steel, as it has a much lower nickel content than traditional refined nickel used in stainless steel. What is one of the most important ingredients in NPI? Cheap Indonesian ore that contains a small amount of nickel (and mostly iron). Until the rise of Chinese-made NPI, this Indonesian ore never saw much demand as stainless steel producers wanted ore that had higher nickel content.

    Now an Indonesian company, PT Indoferro, is gearing up to challenge the Chinese at their own game, using the same Indonesian ore. Its factory producing NPI is said to be the first of its kind in the world outside China. Last year, Indoferro exported 125,000 tonnes of NPI and some 250,000 tonnes of alloy pig iron (another type of pig iron). Naturally, it is using ore from Indonesia.

    Indoferro is a unit of the Indonesia-based Growth Steel group, which was founded in 1969 by steel entrepreneur Fajar Suhendra and his brother Sugih Suhendra. After more than four decades, the group became one of the biggest in the country's nascent steel industry, dominated by big names such as PT Krakatau Steel. Its aim is to use its pig iron and nickel pig iron to fill domestic needs. The company also would like to reduce Indonesia's dependency on imported steel and steel raw materials from China.

    In 2007, Growth Steel group put in $130 million of investment to set up Indoferro. As the global economic crisis hit most countries in 2008, Indoferro's plans for production were then put on hold. The company started its operation in 2009 and produced its first pig iron three years later, after several trials and errors. All of Indoferro's first production of nickel pig iron and regular pig iron were successfully shipped to Taiwan and India last year. Soon after the first shipment, Indoferro signed a 30-year contract to sell between 100,000 to 120,000 tonnes of pig iron every year, worth $100 to $120 million, to Walsin Lihwa Corp., a stainless steel producer in Taiwan.