KRAS agrees to supply auto component SMEs

JAKARTA: Indonesia’s largest steelmaker, state-owned PT Krakatau Steel (KRAS), has agreed to supply 3,000 tons of much-needed steel per month to the Automotive Component Industry Cooperative (KIKO) for manufacturing purposes.

Both parties on Tuesday signed a memorandum of understanding (MoU), which also includes a commitment by Krakatau Steel to import 2,000 tons of steel per month to meet KIKO’s demands, which are not met by domestic production.

The automotive component industry in the country has been struggling with a lack of supply in raw materials, forcing them to import raw materials from overseas, according to KIKO chairman M Kosasih.

“Another problem is that we have to find many different suppliers, which leads to fluctuating prices,” he said at the signing on Tuesday.

KIKO was established in February this year to support the automotive component industry in Indonesia. Besides housing and facilitating 72 small and medium enterprises (SMEs) within the industry, KIKO also plans to sell its own in-house brand, KIKO, in Indonesia.