Cilegon is located in West Java, Indonesia, just over a hundred kilometers from the capital, Jakarta. It's near the coast, where rows of coconut palms swaying in the breeze stand out against the roofs of little houses under the bright sun--a typical tropical scene.

This unprepossessing place has, for the past three years, been a temporary home to people from 14 countries. Their purpose in coming here: to construct Indonesia's first cold-rolling steel mill, the Cilegon P.T. Cold-Rolling Mill Indonesia.

As this April's completion date drew near and the various engineering projects were completed, the foreign technicians gradually departed. But the Chinese, although the faces have changed, remain.

The Chinese are technical personnel of China Steel Corporation and the Retired Servicemen's Engineering Agency (RSEA). RSEA was in charge of the civil engineering aspects of the mill's construction, while China Steel has supplied advisors, technicians, and training personnel to assist with operations. As the civil engineering work drew to a close, the RSEA personnel began to leave, but the important work of trial runs and operation fell to China Steel.

At present, the core managers of the mill, including acting general manager David Wu, are mostly from China Steel. This is China Steel's first overseas "technology transfer."

Technology transfer is nothing new to Taiwan industries; the textile and footwear industries, among others, had begun "whole plant exports" to places such as Southeast Asia and Central America long ago.

But in heavy industry, the ROC built its first large steel refinery just ten years ago, relying heavily on technical guidance from foreign consultants. How has it managed to earn the trust and confidence of the Indonesians in this mammoth project?

The Cilegon cold-rolling steel mill is capitalized at US$830 million, one of the owners being Indonesia's largest consortium, the Lin group, directed by Lin Shao-liang, a Chinese Indonesian. Cold-rolled steel is superior to hot-rolled steel in quality and has a higher added value, but a cold-rolling steel mill requires more advanced equipment, higher technology, and greater investment than a conventional mill. For the Lin group, the investment was no problem, but they had to look overseas for the necessary technicians.

In 1981, taking advantage of a visit to Indonesia by Sun Yun-suan, the ROC Premier at the time, and Chao Yao-tung, then Minister of Economic Affairs and formerly of China Steel, Lin Shao-liang expressed his desire for China Steel to provide technical assistance on the project. China Steel formed a consulting group with UEC, the U.S. company that had helped it build its own steel mill a decade earlier, now no longer as a student but as a teacher in its own right, and began sending its advisors and technical personnel to Cilegon.

At the same time, top-level people from the Lin group who visited the China Steel plant on Taiwan were impressed enough by what they saw to sign a US$74 million contract with RSEA, which had provided the civil engineering work on the China Steel plant.

The main concessionaire for the Cilegon mill was an association formed by a French and a Spanish company, while other subcontractors included a South Korean firm. "Working in a 'mini-UN' like this, we were each trying to outdo the others," a China Steel engineer said." Nobody wanted to look bad!"

One of the first to go to work was RSEA. Their job was not easy. The size and complexity of the project meant that tolerance for error was slim. And besides quality demands, time constraints were even more pressing.

Because construction of the plant itself had to get under way as soon as possible, 70 percent of the civil engineering work was concentrated in the one year, 1985, although the contract period ran for 36 months.

Weather was the biggest problem. Indonesia has a dry season and a rainy season, the temperature remaining around 30 degrees centigrade year-round, and the rainy season runs from November to April of the following year.

"When a couple of 'ponds' we saw on the ground turned out to be quagmires full of mud from the rain, our hearts sank," an engineer said, describing his first view of the worksite.

No doubt about it, the rainy season can play havoc with cost control. When work was slowed down by the rains the first year, the French contractor demanded that RSEA increase its equipment to speed up the work, but RSEA balked at the cost, promising to catch up after the rains stopped instead. The wait was tough. Project manager Fan Kuo-chang often led his group to a reputedly efficacious temple half an hour's drive away to pray for the weather to clear. "It wasn't that I really believed it would work," he revealed after the fact. "It was just to boost morale."

Finally, the dry season arrived. From March on, RSEA worked round-the-clock to catch up, completing their site preparation work five months later--on schedule.

The next pressing deadline was for construction of the steel mill itself. To catch up, Fan Kuo-chang took advantage of the low local labor costs and adopted "human-wave tactics," hiring over 3,000 workers from the area. In this way, RSEA's work, scheduled under contract for completion in October 1986, was finished by August, two months in advance. Even the French were impressed, awarding Fan a plaque in recognition of his accomplishments.

Just as RSEA was wrapping up its work on the project, China Steel's consultants began facing challenges of their own. There are two kinds of consultants, Wang Yuan-ching, a China Steel engineer, points out: One kind answers the questions his employer raises, and the other gives his employer answers even if he doesn't know enough to ask. "This was our first technology export, and our service had to be tops so we could establish a reputation," he said with a smile, adding that they all worked as the second kind of consultants.

China Steel's main responsibility in the project consists of technology transfer: teaching the Indonesians how to maintain and operate the mill. The China Steel people have gradually been over departing a five-year period as the Indonesians acquire the necessary expertise.

Mastering the French equipment presented a challenge to the consultants at first, used as they were to the U.S. and Japanese systems. "We got by nonetheless," said plant manager Ch'en Wen-tuan, explaining that even though the equipment was new to them, nothing could go wrong as long as they "went by the book."

Overcoming another problem took more work. "We engineers are quiet types who just plug away at our work," a China Steel consultant put it. "We don't like to go about tooting our own horns."

The Lin group naturally had confidence in China Steel since it gave them the job, but the Europeans didn't necessarily share the feeling. "Some people didn't exactly trust us," said Huang Po-yang, a young engineer, recalling that the French were unwilling at first to let the Chinese at the controls. "Fortunately," technician Ts'ai Yung-huan added, "with machines you can tell right away if somebody knows what he's doing."

A few weeks later, the control room was turned over to the Chinese. Discussing this event, Huang Po-yang doesn't mention the toil exerted: "At home I never thought of myself as much of a patriot, but overseas, especially working in a 'United Nations' like this, I couldn't help wanting to stand up for my country. Your own reputation is one thing, but letting down your country--who would want to do that?"

For the China Steel engineers, the technical operations were really no problem. "Training and managing the local workers--that's the headache," plant manager Ch'en Wen-tuan said.

The Indonesian's work habits, time concepts, and religious practices were all difficult for the Chinese to get used to. But perhaps the biggest problem was the low wages: Indonesian technicians performing the same work as foreigners earned much less. "As a result, one of my biggest jobs has been trying to console them," said acting general manager David Wu. Wu sought housing, transportation, medical, and other benefits for them, but was most successful with this little speech: "This plant belongs to you. I'm an 'outsider' who's only here temporarily to help. One day my place will be taken by one of you." The Indonesians' attitude finally changed.

Production at the mill is now about to begin, yet China Steel has already gained some valuable experience from the project. Both it and RSEA were particularly impressed with the efficiency and organization of the French.

"The French make money by management, while we rely on the sweat of our brows," sighs Fan Kuo-chang. "Our technology is fine, but unless we improve our management, we'll only be able to make money the tough way."

Learning from others, getting to know oneself, striving to improve--these are some of the gains of the job. The project also marks a new milestone in the ROC's advance on the world marketplace.

And the Cilegon cold-rolling steel mill is only a beginning.

[Picture Caption]

In the "mini-U.N." of the Cilegon plant, the posters are written in many languages.

An engineer from China Steel (at right) instructs Indonesian technicians on operating a piece of equipment.

RSEA took on another job as opening day approached: beautifying the grounds to welcome President Suharto to the opening ceremony. This is the parking lot.

A group portrait of China Steel engineers inside the plant. Their exposure overseas was a first.

The living quarters at Cilegon provide ample space for outdoor activies after work. These two are a pair of "little China Steelers."

A small shop at Cilegon.

An overview of the Cilegon cold-rolling steel mill. (courtesy of RSEA)

Carefree scenes like this are common in the Indonesian countryside.

An engineer from China Steel （at right） instructs Indonesian technicians on operating a piece of equipment.

RSEA took on another job as opening day approached: beautifying the grounds to welcome President Suharto to the opening ceremony. This is the parking lot.

A group portrait of China Steel engineers inside the plant. Their exposure overseas was a first.

The living quarters at Cilegon provide ample space for outdoor activies after work. These two are a pair of "little China Steelers.".

A small shop at Cilegon.

An overview of the Cilegon cold-rolling steel mill. （courtesy of RSEA）

Carefree scenes like this are common in the Indonesian countryside.