Posco, Krakatau Steel to build blast furnace, cold rolling mill in Indonesia
Posco signed a memorandum of understanding with Krakatau Steel, an Indonesian state-run steelmaker, to jointly build a blast furnace and cold rolling mill in the Southeast Asian country.
The two companies agreed to jointly spend $3.5 billion on the project over the next five years, though the breakdown of expenses has not been disclosed.
The agreement was made Thursday during Indonesian President Joko Widodo's visit to Seoul, with Posco CEO Kim Hag-dong and Krakatau Steel CEO Silmy Karim in attendance.
The blast furnace and cold rolling mill will be located in Krakatau Posco, a 70-30 integrated steel facility owned by Posco and Krakatau Steel. The mill is located in Cilegon, northwestern Java, which currently already operates a blast furnace with 3 million tons of annual capacity.
The construction of the new blast furnace will raise the capacity to 6 million tons, Posco said.
Posco said it will also participate in a project to build waterworks in Indonesia. The Indonesian government promised to offer support or incentives regarding Posco's business in the country, according to the company.
"With the cooperation of the Indonesian government and Krakatau Steel, Posco is now able to construct the second blast furnace in our first overseas integrated steel mill," Posco CEO Kim said.
BY SARAH CHEA [email@example.com]