Korea's Posco to develop two steel mills in W. Java<\/p>\n
JAKARTA (JP): South Korea's Pohang & Iron Steel Co. (Posco)
\nhas embarked on the development of two joint venture steel mills
\nin West Java with a total investment of US$675 million.<\/p>\n
One of the projects, a $175-million stainless steel, cold-
\nrolling mill, will be developed in Bekasi in a joint venture with
\nPT Perkasa Stainless Steel Industry.<\/p>\n
\"We signed the memorandum of understanding for the building of
\nthe first Indonesian stainless steel plant this morning,\" PT
\nPerkasa's president commissioner Sudwikatmono said yesterday.<\/p>\n
On Wednesday, Pohang signed a joint venture agreement with
\nstate-owned PT Krakatau Steel, PT Nusamba and Korindo Group of
\nSouth Korea, to build a $500-million mini steel mill in Cilegon.<\/p>\n
Sudwikatmono foresaw great market prospects for stainless
\nsteel in the country as the domestic demand has been increasing
\nby 44 percent over the past five years.<\/p>\n
\"The domestic market demand is estimated at 60,000 tons for
\n1996, all of which has to be entirely imported ,\" he said, adding
\nthat his stainless steel mill would be designed initially with an
\nannual capacity of 75,000 tons.<\/p>\n
\"Therefore, Indonesia will be able to save between $100
\nmillion and $200 million in annual foreign exchange spending
\nafter the stainless steel plant comes on stream in 1999,\"
\nSudwikatmono said.<\/p>\n
Posco's executive president Lee Chun Ho shared Sudwikatmono's
\nbullish projection of the stainless steel market in Indonesia.<\/p>\n
Sudwikatmono added that the total investment of the plant,
\nwhich will produce two types of stainless steel-- Austenitics
\n(300 series) and Ferritics (400 series)-- is estimated at $175
\nmillion.<\/p>\n
Posco, the world's largest steel company, will own 70 percent
\nof the joint venture stainless steel company which will be set up
\nin February next year with the remaining 30 percent to be held by
\nSudwikatmono's PT Perkasa.<\/p>\n
According to PT Perkasa's vice president Sudhamek A.W.S, the
\n30 percent share is owned jointly by Sudwikatmono, Rasyid Brasali
\nand Sutanto Yusuf.<\/p>\n
PT Perkasa's technical manager Paulus Sutikno said the cold
\nrolled steel coils to be manufactured by the mill will be of 0.5
\nmm to 3.0 mm in thickness.<\/p>\n
The mill will still have to depend on imports for about 70 per
\ncent of its raw materials.<\/p>\n
\"Imported steel materials are still much better than local
\nones,\" Sudwikatmono said.<\/p>\n
Sudhamek said that 70 percent of the stainless steel
\nproduction will be sold in the domestic market and the remaining
\n30 percent will be exported to the Association of Southeast Asian
\nNations and China.<\/p>\n
Posco and PT Krakatau Steel each own 40 percent of the joint
\nventure mill in Cilegon and Nusamba and Korindo each hold 10
\npercent.<\/p>\n
The construction of the Cilegon steel plant, named PT KS-
\nPosco, will start next year and is expected to be completed in
\n1999, he said.<\/p>\n
The steel plant will be designed initially with an annual
\ncapacity of one million tons of hot-rolled steel coils. This will
\nbe doubled in the later stage of development. (06)<\/p>\n
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