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ublicly listed steel maker PT Krakatau Steel will increase its share ownership in the company's joint ventures with Korean and Japanese companies, which are now completing their steel plants in Indonesia.

President director Irvan Kamal Hakim said Krakatau, which is controlled by the government, would exercise its option to boost its ownership in the two joint ventures.

PT Krakatau Posco, a joint venture with South Korean steel giant Pohang Iron and Steel Company (Posco), will start operations this December.

'The project's completion has reached 85 percent. In line with our target, it will start production on Dec. 23,' Irvan said after the company's annual general meeting of shareholders on Thursday.

Krakatau ' the shares of which are traded on the Indonesia Stock Exchange (IDX) under the code KRAS ' and Posco established Krakatau Posco in late 2009 to build a steel mill in Cilegon, Banten, with US$6 billion in total investment.

KRAS has a 30 percent stake in the joint venture while Posco holds the remaining 70 percent.

Under the agreement, Krakatau will have the option to increase its stake to 45 percent in the joint venture.

'The ownership will be increased a year after the joint venture starts its commercial operation. We will say how we will finance the stake increase when the time comes,' Irvan said.

Besides Krakatau Posco, KRAS also has a joint venture with Nippon Steel Trading Co. Ltd. The joint venture is called PT IndoJapan Steel Center, which is developing a factory in Karawang, West Java. IndoJapan's factory will have a production capacity of 120,000 tons of steel sheets to be used for the production of automotive parts.

IndoJapan director Wawan Hernawan said the company expected to complete the construction of the plant in May.

'We will have machinery arrive in June and October. We will partly operate in July,' Wawan said, adding that the plant was expected to begin full operations in November.

He also said IndoJapan had started to market its products to automotive players in the country, such as Honda.

KRAS, according to Wawan, also has the option of increasing its stake in IndoJapan a year after its commercial operation began.

'The option is that KRAS can have up to 45 percent from the current 20 percent. Talks can be opened a year after operations begin,' Wawan said.

Under the initial agreement of the establishment of IndoJapan in 2011, KRAS holds 10 percent, Nippon Steel owns 30 percent while partners PT Adyawinsa Dinamika PT Dwijaya Sentosa Abadi hold 30 percent each.

However, Adyawinsa and Dwijaya sold their stake last year to KRAS and Nippon Steel. Consequently, KRAS currently holds a 20 percent stake in IndoJapan while Nippon owns 80 percent.

KRAS reaped $615.97 million in revenue during January to March, increasing slightly by around 3 percent compared to $598.86 million in the same period last year.

The company's operating profit stood at $15.59 million in the first quarter of the year, increasing significantly compared to $1.17 million in the same period last year.

However, its net profit was 16 percent lower to $9.1 million in the first quarter of the year compared to $10.89 million year on year.

Losses from associate companies, lower financial income and lower gains on foreign exchange have made KRAS unable to translate increases in operating profit into net profit, according to its financial report.

Shares in KRAS were closed at Rp 540 apiece on Thursday, declining by 5.26 percent compared to a day earlier.