Posco ties up with Korindo to make tinplate

JAKARTA (JP): Korea's Pohang Iron & Steel Co. Ltd. (Posco) and domestic firm Korindo group have signed an agreement to form a joint venture, PT Posko Tin Indonesia, to build a tinplate mill in West Java, Korindo announced yesterday.

The joint venture, 70 percent owned by Posco and 30 percent by Korindo, will spend about US$55 million setting up the mill.

The mill is scheduled to start commercial production in 1999 and produce up to 100,000 tons of tinplate a year.

"Indonesia's reliance on imported tinplate will be significantly relieved after the completion of this project," said Chun Ho Lee, Posco's executive vice president.

PT Pelat Timah Nusantara is now the country's only tinplate manufacturer, producing about 130,000 tons a year. Domestic demand for tinplate is estimated to be 230,000 tons a year.

Korindo forecasts that local demand for tinplate will exceed 300,000 tons a year after 2000.

The joint venture is part of Korindo's plan to diversify from manufacturing logging and plywood, newsprint paper and pulp, sport shoes, containers, fine chemicals and finance.

The company said the joint venture was initiated by the bright prospects of the domestic canning industry.

"Investment to canning industry has greatly increased," Dong Hwan Kim, Korindo's vice chairman, said.

The company set up another joint venture recently with Posco, PT Nusamba and PT Krakatau Steel to build a second generation steel mill.

The mill, scheduled to start in 1999, is expected to cost $700 million and be able to produce 2,000,000 tons of steel a year.

Posco has invested in several iron and steel projects in South East Asia. (02)