Indonesia steel plant producing

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Indonesia steel plant producing


Posco Chairman Chung Joon-yang, center left, and Indonesian President Susilo Bambang Yudhoyono shake hands after signing their names on a steel plate produced by Krakatau Posco, a joint venture between Posco and PT Krakatau Steel, at the Krakatau Industrial Estate in Cilegon, Indonesia, yesterday. Provided by the company

Posco, the nation’s largest steelmaker, has officially started operating Southeast Asia’s first integrated steel mill yesterday along with Indonesia steelmaker PT Krakatau Steel.

The furnace-lighting ceremony for Krakatau Posco, a joint venture between Posco and PT Krakatau Steel, was held yesterday at the Krakatau Industrial Estate in Cilegon, Indonesia. The two companies have invested a total of $2.7 billion into the operation.

Posco Chairman Chung Joon-yang, Indonesian President Susilo Bambang Yudhoyono, Indonesian Coordinating Minister for Economics Hatta Rajasa, Korean Deputy Minister of Trade, Industry Energy Kim Jae-hong and 500 guests attended the ceremony.

“It wasn’t an easy journey for the construction of an integrated steel mill in the past 30 months, but with Korea’s technology and Indonesia’s superb human resources, we succeeded together,” said Chung. “As Posco became a foundation of Korea’s economic development,
I believe Krakatau Posco will do the same for Indonesia.”

Posco first produced melted iron in Pohang, North Gyeongsang, 40 years ago, but this is the first time the company has performed the process overseas.

Posco has a 70 percent stake in the joint venture. However, under the contract, PT Krakatau Steel has an option to increase its 30 percent stake to 45 percent.

The plant will produce steel materials including plates and slabs to feed heavy industries like pipe manufacturing, shipbuilding and marine construction. PT Krakatau Posco will start operation with a production capacity of 3 million tons (1.8 million tons of slabs and 1.2 million tons of plates) a year, but it aims to double that in the next phase.

Posco said Krakatau Posco will first supply 1.5 million tons of slabs and 600,000 tons of plates in Indonesian next year and once production is
in full-swing, it will look to expand sales in the Middle East.

Posco said it will try to establish Krakatau Posco’s competitiveness by maximizing its manufacturing technology. It will use as much as 30 percent of iron ore from Indonesia and dispatch skilled company supervisors to the plant to ensure high-quality products like those produced at Pohang and Gwangyang Steel Works.

Posco said its affiliates in various areas have come together to build the Indonesian plant, while PT Krakatau Steel also mobilized its subsidiaries.

Posco Engineering and Construction was in charge of integrated engineering and construction of the plant, while Posco Energy set up a 200-megawatt steam power plant to supply electricity.

Posco ICT established the IT system for the plant, while Posco Chemtech took care of the limestone calcination furnace and acid byproduct
facilities. Posco M-Tech built the aluminium deoxidizer plant.

Posco said its trading affiliate, Daewoo International, will help export and sell products from Krakatau Posco and support resource development in Indonesia.


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