S.Korea's POSCO denies $5 bln Indonesian steel plan
JAKARTA (Reuters) - South Korea's POSCO (005490.KS) denied on Wednesday comments by Indonesia's government that it was planning a $5 billion investment in the country, possibly through a venture with its top steel firm.
"POSCO has expressed interest in investing in Indonesia's steel industry with a total investment of $5 billion...They are working on the joint venture with Krakatau Steel," Indonesia's Trade Minister Mari Pangestu told reporters late on Tuesday.
The minister said she met POSCO officials earlier this month during her visit to South Korea to attend the funeral of former South Korean President Kim Dae-jung.
But POSCO, the world's No. 6 steelmaker, denied such a plan.
"We haven't considered any investment deal in Indonesia and haven't met Indonesian officials for this matter," POSCO spokeswoman Choi Youn-joung said.
POSCO's denial comes after similar reports of its investment interest were made late last year.
The Indonesian State Investment Board had said in December that POSCO was interested in building a steel plant with a production capacity of 2.6-3.1 million tonnes a year and that it was in talks with Indonesia's state-owned PT Krakatau Steel, the country's biggest steel producer.
Separately, Ansari Bukhari, director general of metal, machinery and textile at the industry ministry, said POSCO management had sent a letter requesting a meeting in early September with officials from the Indonesian industry ministry in order to discuss the investment plant plans.
"A joint venture with Krakatau Steel is one of their options," Bukhari said, adding that if the joint venture went ahead, it would help Krakatau Steel to achieve its target of doubling its production to 5 million tonnes.
Land for the new steel plant project has already been allocated at Krakatau Steel's vast industrial complex in Cilegon, West Java, Industry Minister Fahmi Idris said on Tuesday.
The global steel industry is picking up after almost a year of poor demand and slumping steel prices.
Global crude steel production in July reached its highest monthly level so far in 2009 as producers brought back idled capacity to meet improved demand, but output was down 11.1 percent from the same month last year.
The improving demand and pricing outlook for steel have also encouraged Asian mills to increase investment.
POSCO's latest overseas investments include the opening this month of an auto sheet steel plant in Mexico with annual capacity of 400,000 tonnes and a planned launch next month of a 1.2 million tonne cold-rolled steel processing plant in Vietnam.
But its major expansion strategy has hit a snag, with a $12 billion steel plant project in India, its biggest overseas investment plan, being delayed for years due to local farmers' protests over land.
($1=1247.1 Won)
"POSCO has expressed interest in investing in Indonesia's steel industry with a total investment of $5 billion...They are working on the joint venture with Krakatau Steel," Indonesia's Trade Minister Mari Pangestu told reporters late on Tuesday.
The minister said she met POSCO officials earlier this month during her visit to South Korea to attend the funeral of former South Korean President Kim Dae-jung.
But POSCO, the world's No. 6 steelmaker, denied such a plan.
"We haven't considered any investment deal in Indonesia and haven't met Indonesian officials for this matter," POSCO spokeswoman Choi Youn-joung said.
POSCO's denial comes after similar reports of its investment interest were made late last year.
The Indonesian State Investment Board had said in December that POSCO was interested in building a steel plant with a production capacity of 2.6-3.1 million tonnes a year and that it was in talks with Indonesia's state-owned PT Krakatau Steel, the country's biggest steel producer.
Separately, Ansari Bukhari, director general of metal, machinery and textile at the industry ministry, said POSCO management had sent a letter requesting a meeting in early September with officials from the Indonesian industry ministry in order to discuss the investment plant plans.
"A joint venture with Krakatau Steel is one of their options," Bukhari said, adding that if the joint venture went ahead, it would help Krakatau Steel to achieve its target of doubling its production to 5 million tonnes.
Land for the new steel plant project has already been allocated at Krakatau Steel's vast industrial complex in Cilegon, West Java, Industry Minister Fahmi Idris said on Tuesday.
The global steel industry is picking up after almost a year of poor demand and slumping steel prices.
Global crude steel production in July reached its highest monthly level so far in 2009 as producers brought back idled capacity to meet improved demand, but output was down 11.1 percent from the same month last year.
The improving demand and pricing outlook for steel have also encouraged Asian mills to increase investment.
POSCO's latest overseas investments include the opening this month of an auto sheet steel plant in Mexico with annual capacity of 400,000 tonnes and a planned launch next month of a 1.2 million tonne cold-rolled steel processing plant in Vietnam.
But its major expansion strategy has hit a snag, with a $12 billion steel plant project in India, its biggest overseas investment plan, being delayed for years due to local farmers' protests over land.
($1=1247.1 Won)