Posco Explores Additional US$4.3 Billion Investment for Steel Plant Expansion
South Korean steel company Posco Holdings has expressed interest in increasing its investment in Indonesia through the development of the second phase of the PT Krakatau Posco (PTKP) project. This commitment was conveyed during President Prabowo Subianto’s visit to South Korea on 1 April 2026.
PT Krakatau Posco General Manager, June Hwang, revealed that during the bilateral meeting, Posco submitted a Letter of Intent (LOI) to the Indonesian government to explore further cooperation opportunities. The focus is on the second-phase development project of PTKP.
Minister of Investment and Downstreaming, as well as CEO of Danantara, Rosan Perkasa Roeslani, who was also present, stated that discussions are ongoing between Danantara and Posco regarding the PTKP project.
“The CEO of Posco Holdings reported plans for an investment worth approximately US$4.3 billion by 2029, and proposed a joint investment scheme with Danantara in a 50:50 composition,” Hwang told Bisnis on Sunday (19/4/2026).
Prabowo, according to him, responded positively to the plan and emphasised the importance of accelerating the project’s realisation. The Indonesian government views the development of PTKP as an important part of driving national industrialisation, particularly through the production of high-value-added steel, including for the automotive sector.
Strengthening the steel industry is considered a foundation for national economic growth and the development of strategic sectors such as automotive, defence, energy, and infrastructure. In the context of the 8% economic growth target, domestic steel industry capacity becomes a key factor in supporting downstream sector expansion.
“The PTKP project is expected to make a significant contribution to Indonesia’s economic growth through the production of high-quality steel, including automotive steel,” said Hwang.
Globally, the steel industry remains the backbone of urbanisation and industrialisation. In Indonesia, steel demand is projected to increase to around 29 million tonnes by 2035, in line with growth in the manufacturing and machinery sectors. However, the supply of high-quality domestic steel is still limited, so reliance on imports is expected to continue.
Therefore, through the second-phase development of PTKP, Posco plans to introduce advanced production technology to enhance efficiency and economies of scale. The project will also produce high-value-added automotive steel, which is currently met by imports for about 90%.
In addition to technological aspects, the company is committed to supporting human resource development in Indonesia’s advanced technology industry sector.
From an economic perspective, the PTKP project is projected to contribute around US$5 billion per year, consisting of a direct contribution to gross domestic product (GDP) of about US$2.2 billion and added value of around US$3 billion. The project is also estimated to create around 36,000 jobs, both direct and indirect.
Currently, Posco, together with Krakatau Steel through PT Krakatau Posco, has been producing around 3 million tonnes of steel per year since 2013 to support various national strategic projects.
“Thus, PT Krakatau Posco is expected to become a strategic partner in realising Indonesia’s national steel industry growth vision,” said Hwang.