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View all search resultsKrakatau Steel to restart hot strip mill in 2026 after Danantara loan
The national steel industry had been operating at only around 50 percent of its capacity amid a sharp global decline in demand and import influx from China, according to the Industry Ministry.
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Krakatau Steel employees watch the production of the first hot rolled coil (HRC) steel in this file photo taken on May 17, 2021, in the company's second hot steel mill in Banten.
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tate-owned steelmaker PT Krakatau Steel has secured a US$295 million shareholder loan from state asset fund Danantara to bolster working capital and support a restructuring plan that includes restarting key production facilities in 2026.
The funding comes as the company has been operating well below capacity since a fire damaged its hot strip mill in 2023, disrupting production at one of its core facilities.
Under its strategic plan, Krakatau Steel aims to operate its hot strip mill at a capacity of 120,000 tonnes per month and its cold rolling mill (CRM) at 50,000 tonnes per month starting in 2026, according to a disclosure published on Tuesday.
“We have conveyed to Danantara the targets that must be achieved in 2026, including the mobilization of all elements of the Krakatau Steel Group to strengthen corporate transformation and performance,” president director Akbar Djohan said in a statement.
Read also: Cash for Krakatau Steel just first step in govt push for self-sufficiency
The financing package includes a Rp 4.18 trillion ($249.6 million) working capital facility with a minimum tenor of five years, which will be used to fund raw material purchases for the hot strip and cold rolling mills, as well as support pipe manufacturing operations.
A separate Rp 752 billion loan, with a minimum tenor of six years, has been earmarked for corporate restructuring measures, including voluntary separation programs, commonly referred to as “golden handshakes,” and efforts to improve the company’s pension fund health.
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