Krakatau Steel pledges efficiency

JAKARTA (JP): State steel producer PT Krakatau Steel wants to become more efficient before its initial public offering (IPO) in October.

Company president Soetoro Mangoensoewargo said yesterday the company set up a task force last month to improve its efficiency and production.

The task force aimed to cut production costs to US$40 for every ton of steel, Soetoro was quoted by Antara as saying.

"If we can reduce production costs to $40 a ton, our product will be competitive and we can rake in a lot of profit," he said.

Krakatau Steel expects to make about $700 million from the IPO to finance its expansion.

Krakatau Steel, one of 10 companies under the government's Management Board of Strategic Industries, dominates the domestic market for flat steel products such as hot rolled and cold rolled coils.

The company, which has six production lines, aims to become the largest steel manufacturer in Southeast Asia by the year 2000.

It plans to increase its annual production capacity from 3.5 million tons now to 7.5 million tons by the year 2000.

Krakatau Steel has formed a joint venture with Pohang Iron and Steel Co. Ltd of South Korea to produce 2 million tons of hot rolled steel coils yearly. It plans to develop another production line to produce up to 2.5 million tons of hot rolled coils yearly. (jsk)