Krakatau Steel, Korean firms tie up
Krakatau Steel, Korean firms tie up
JAKARTA (JP): The state-owned steel company PT Krakatau Steel will establish a joint venture with Korean firms to build its second plant with funds to be raised from its share offering on international markets later this year.
Krakatau Steel's president, Soetoro Mangoensoewargo, announced Thursday evening that the venture company's shares will be 40 percent owned by Krakatau Steel, 40 percent by Pohang Iron and Steel Co. (Posco) of South Korea, 10 percent by another Korean company, Korindo Group, and 10 percent by PT Nusantara Ampera Bhakti (Nusamba).
"The government, as the shareholder in Krakatau Steel, has ordered us to hold only 40 percent of the equity in the joint venture," Soetoro said.
Earlier report said Krakatau Steel and Posco will each have 50 percent in the venture.
He added that Nusamba, associated with Mohammad (Bob) Hasan, holds a 9-percent stake in PT Pelat Timah Nusantara (Latinusa), a tinplate company majority owned by Krakatau Steel.
Soetoro said the venture will build the Krakatau Steel II plant in September 1997 with a production capacity of four million tons per annum, said Soetoro.
Krakatau Steel currently has an annual production capacity of 2.5 million tons, which will be increased to 3.5 million tons in 1998 and to 4.5 million tons in 2,000.
Soetoro said Krakatau Steel will hold its international public offering (IPO) in October to sell parts of its shares abroad.
Some US$500 million of the funds to be generated from the IPO will be used to finance construction of the second plant.
Prior to the IPO, Krakatau Steel will complete the consolidation of its businesses in June.
"All six subsidiaries of Krakatau Steel are supposed to be independent companies by June 1996," Said Soetoro.
The six subsidiaries are PT KHI Pipe Industries, PT Latinusa, PT Krakatau Wajatama (KW), PT Tobu Indonesia Steel Co. Ltd. (Tobusco), PT Krakatau Engineering Corporation (KEC) and PT Krakatau Industrial Estate Cilegon (KIEC).
Soetoro said Krakatau Steel, which gained a net profit of Rp 250 billion last year, expects a profit of Rp 130 billion this year due to declines in steel prices on the world market.
He said 20 percent of the company's products are exported to Malaysia, Japan and the United States. (kod)