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Krakatau Osaka kicks off operation

Steelmaker PT Krakatau Osaka Steel officially commenced on Thursday the operation of its new plant in Cilegon, Banten, built with an investment of US$220 million

The Jakarta Post
Cilegon, Banten
Fri, July 21, 2017

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Krakatau Osaka kicks off operation

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teelmaker PT Krakatau Osaka Steel officially commenced on Thursday the operation of its new plant in Cilegon, Banten, built with an investment of US$220 million.

With the plant, the firm, which is 80 percent owned by Japanese steel maker Osaka Steel Co. Ltd. and state-owned steel producer PT Krakatau Steel, will be able to produce 500,000 tons of steel for construction and automotive purposes, such as reinforcing steel bars, equal angles and flat steel bars, each year.

In the first year of its operation, however, it will only produce 200,000 tons of steel.

Krakatau Steel president director Mas Wigrantoro Roes Setiyadi said he expected that most of the products would be sold domestically and that, with the new plant, Krakatau Osaka could help erase the country’s steel deficit.

“Besides jacking up our capacity, the new plant also adds new types of steel, which supplements our existing product portfolio,” he said during the inauguration of the plant.

Mas Wigrantoro further said that the operation of the facility was in line with a road map to make Cilegon a steel industrial cluster with an annual production capacity of 10 million tons by 2020.

The Indonesian steel giant has intensively expanded its business in recent years through partnerships with foreign players. Before joining hands with Osaka Steel, it had teamed up with South Korea’s Posco, the world’s fifth largest steel maker, and Japan’s Nippon Steel and Sumitomo Metal Corporation (NSSMC), the world’s second largest steel producer, to build new facilities.

Located in a 21-hectare area, the construction of the Krakatau Osaka plant concluded last December and conducted preliminary operations were conducted early this year.

The company is the first manufacturer of S50 reinforced bars, which are usually used in the construction of railway and toll roads.

At present, the plant sources its key raw material, steel billet, from Japan to support its production as Krakatau Steel temporarily halted its production of the steel.

However, Mas Wigratoro said that after his firm resumes steel billet manufacturing in October, it would supply 20 percent of Krakatau Osaka’s needs.

Speaking during the event, Osaka Steel president director Masaki Iwasaki said that by operating the plant, Krakatau Osaka could tap into the opportunity offered by the Indonesian government’s massive infrastructure development projects.

“The company can support the infrastructure projects in Indonesia by providing high quality steel,” he said.

Of the prioritized infrastructure projects, Krakatau Osaka will handle the Jakarta-Cikampek II elevated toll road.

Krakatau Steel finance and human resources director Dwi Bagoes Endrijansja said that his company was currently in talks with state-owned construction firm PT Waskita Karya and its partner, PT Acset Indonusa, which were developing the road.

“We are going to carry out a trial for the pillars with our S50 reinforcing bars,” he said.

Prior to the project, Krakatau Steel had supplied its steel products to state-owned electricity firm PLN in the latter’s tower construction projects.

Industry Minister Airlangga Hartanto, who attended the inauguration, said the establishment of the plant could help to realize the target of producing 10 million tons of steel by 2020.

“We can attain the target if we keep developing new technology and encourage new investment in this sector,” he added. (rdi)

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