Krakatau Steel develop hot strip mill with investment $460m
JAKARTA (TheInsiderStories) – Indonesia steel maker, PT Krakatau Steel Tbk (IDX: KRAS) develop the construction of a second factory Hot Strip Mill 2 in Cilegon, Banten province worth US$460 million (equivalent to Rp 6.2 trillion). The new plant will increase the production of hot rolled coils (HRC) of 1.5 million tonnes per year.
Chairman of the Investment Coordinating Board (BKPM) Thomas Lembong said that the plant expansion is expected to be completed in 2019 is expected to overcome the deficit of the national steel including reducing the trade deficit as a result of steel imports, which reached $7.2 billion in 2014.
“The expansion undertaken by Krakatau steel is very positive in encouraging the development of the capacity of the steel industry in the country, “he said during the groundbreaking ceremony (groundbreaking) second plant Hot Strip Mill 2 in Cilegon on August 22.
According Lembong, this expansion project shows the investment climate in Indonesia is conducive and competitive. The steel industry is one of the priorities and absolutely necessary as the demand for steel to support the development of the national automotive industry where Indonesia is currently the largest market in the ASEAN automotive industry as well as in support of infrastructure development are increasingly stretched, he continued.
Earlier, Krakatau Steel and PT Krakatau Posco have signed a Memorandum of Understanding on May 12 for the construction of phase two steel clusters as steps towards national targets steel production capacity of 10 million cubic meters per year.
South Korea made up the fourth-largest foreign direct investment in Indonesia by sources after Singapore, Japan and the US. From 2010 through March 2015 period, South Korea made $7.46 billion in investments in the country, according to the latest available data from the BKPM.
The new projects include a hydropower plant in Lampung with total capacity of 145 megawatts and a garment industry in Central Java that could absorb 4,000 workers.
South Korean companies that already invest in Indonesia are including Posco, the biggest steelmaker in South Korea, which has set up a joint venture with Krakatau Steel to produce steel slabs for manufacturing.
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Source: The Insiderstories
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