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)