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Krakatau Steel Establish Two Joint Ventures with Japan

23 March 2015 16:36 WIB

Pekeja mengamati pembuatan baja di Pabrik Krakatau Steel, Cilegon, Banten, 26 November 2014. TEMPO/Tony Hartawan

TEMPO.CO, Jakarta - In collaborations with Japanese investors, PT Krakatau Steel Tbk. has formed two joint ventures, namely PT Krakatau Osaka Steel (KOS) and PT Krakatau Nippon Steel Sumikin (KNSS), to produce steel for automotive and construction industries.

Each of the companies has a production capacity of 500,000 tons with a total investment of US$500 million.

"Krakatau-Nippon will produce steel for automotive [industries], while Krakatau-Osaka will work on steel for construction. Krakatau Steel will supply raw materials for the automotive steel factory. But it won't be supplying [raw materials] yet for construction steel plant," Muhammad Khayam, the director for basic chemical industry at the Industry Ministry told Bisnis.com.

The two steel plants are expected to boost local content in vehicle production and infrastructure projects. Currently, local automotive and construction industries are counting on imported materials with particular specifications, since Krakatau Steel only produces standard steel.

The joint venture projects are built on a land with a total size of 40 hectares. The construction of the plants was predicted to absorb about 2,000 workers and about 400 more after the plants are fully operational.

Kazuhiro Egawa, an executive officer for overseas business development at the NSSMC, said that Krakatau Osaka Steel will be fully operational in 2016, while the Krakatau Sumikin will start its operation in 2017.

BISNIS.COM



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