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View all search resultsUnion blames Nusantara slowdown for steel plant closure
The Confederation of Indonesian Trade Unions (KSPI) has partly attributed the production halt and planned shutdown of steelmaker PT Krakatau Osaka Steel (KOS) to muted demand from the Nusantara capital city (IKN) project in East Kalimantan.
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An employee finishes production of steel pipes in this undated photograph at the Krakatau Steel plant in Cilegon, Banten. (JP/-)
T
he Confederation of Indonesian Trade Unions (KSPI) has partly attributed the production halt and planned shutdown of steelmaker PT Krakatau Osaka Steel (KOS) to muted demand from the future capital Nusantara in East Kalimantan.
KSPI chairman Said Iqbal explained that the megaproject and toll road construction were the firm’s main market.
“The IKN [Nusantara Capital City] Authority and toll road projects have slowed down and often stalled, causing steel demand to decline,” he said on Thursday, as quoted by Kompas.com.
Said added KOS had also been facing mounting competition from cheaper steel products imported from China.
KOS, a joint venture of state-owned steelmaker PT Krakatau Steel and Japanese steel producer Osaka Steel Co, ceased production in late April and plans for a full shutdown in June.
The decision was announced during a board meeting in January, as the company has been suffering from losses and a declining performance since 2022.
According to the KSPI, the closure would lead to the layoff of 200 workers, and the process to fulfill workers’ rights was still being negotiated between the workers and the firm’s management.
