Krakatau Steel to up HRC by 1m tons

The Jakarta Post, Jakarta

State-owned steel-maker PT Krakatau Steel revealed its plan on Tuesday to expand its hot rolled coils (HRC) production by a million tons per year by 2008 through the establishment of a new plant that will cost between US$340 million and $550 million.

"When the new plant is ready in 2008, we expect our production capacity to increase to 3.4 million tons annually," Krakatau Steel corporate secretary Doni Sugihmukti told a press conference.

Antara quoted Doni as saying that the production capacity expansion was necessary to meet the firm's target by 2008 to become a world steel supplier, with competitive prices.

Moreover, the company would undergo more expansion to become a dominant world steel supplier with a likely production of up to 10 million tons by 2013.

Krakatau Steel's expansion and privatization project team head Irvan Kamal said that a committee was conducting a pre- qualification selection for potential bidders before opening the bid internationally.

"The tender winner will be announced in January next year, so the construction could start around June 2006," he said.

The development of the new plant, which will use the latest technology of "thin slab caster", was expected to be finished by 2008, he added.

According to Irvan, a number of world steel contractors, which have expressed interest in the project, are mostly grouped in a variety of consortia. They include German-based SMS Demag, Korean Samsung Corp., Hong Kong-based Cosco Engineering Construction and Danneli of Italy.