Jakarta (ANTARA News) - State steel maker PT Krakatau Steel plans to build an integrated steel plant in South Kalimantan at a total cost of US$600 million to meet demand for ingot steel.
"In the first phase of the project we will build a billet plant in South Kalimantan," PT Krakatau Steel President Director Fazwar Bujang said here on Tuesday.
The presence of such billet plant was badly needed to make maximum use of the production capacity of the domestic ingot steel industry which currently reached less than 60 percent, he said.
"Today, the domestic ingot steel, reinforced steel and wire steel plants are operating at less than 60 percent of their production capacity due to the lack of billets," he said.
Indonesia still has to import semi-finished billets at higher prices to meet much of the country`s demand for the commodity, he said.
Therefore, before the company build an integrated steel industry in South Kalimantan it would focus on developing a billet plant with a production capacity of around 1 million tons per year, he said.
"Ingot steel industry is very important for developing countries like Indonesia where demand for ingot steel is higher than that of steel plate," he said.
"We have set ourselves a target of completing a feasibility study on the construction of an integrated steel industry in South Kaliamantan in 2009 and in the next 30 months the construction of the plant will be completed," he said.(*)