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Two overseas steel giants, Daewoo of South Korea and Blue
Scope Steel of Australia, will invest a total of US$115 million on
building steel plants in Indonesia.
Despite worsening bilateral relations between Indonesia and Australia,
Blue Scope Steel will build two steel plants in Indonesia at a total
cost of about US$105 million.
Its subsidiary, PT Blue Scope Steel Indonesia (BSSI), the only producer
of metal-coated steel in Indonesia, will construct a steel plant in
Cilegon, Banten, at a cost of $101.1 million.
Meanwhile, another subsidiary, PT Blue Scope Lysaght Indonesia (BSLI),
will build a plant in Cibitung, West Java, at a cost of $3.9 million.
BSSI's country vice president marketing and solutions, Lucia Karina,
said that the steel plant in Cilegon would start operating early in
2008 and produce 90,000 tons of metal-coated steel and 55,000 tons of
color-coated steel per year.
The BSLI plant in Cibitung will produce steel roof tiles, and have an
annual production capacity of 8,500 tons of welded steel mesh and 4,500
tons of rollformers coated steel.
But BSLI's media relations officer, Husni A Puspitasari, said that it
was not yet clear when the Cibitung plant would commence operations.
Meanwhile, Loh Young Tae, president director of PT International Steel
Indonesia, a joint venture between Daewoo and a local Indonesian
company, told detikcom here Monday that Daewoo was building a steel
plant in Indonesia at a cost of US$10 million.
"Currently, we're constructing the factory on a site of 21,000 square
meters in Karawang, West Java. Hopefully, it will be finished in June
so that we can start operations in July of this year," said Tae, who is
also the deputy general manager of Daewoo International Corp.
He said that PT International Steel Indonesia was 51 percent owned by
Daewoo International, 40 percent by PT Selamat Sempurna (ADR Group) and
nine percent by a technical partner from South Korea.
According to Tae, having reached a deal with PT Krakatau Steel and Blue
Scope Steel Indonesia for the supply of raw materials, the plant would
have a production capacity of 240,000 tons of steel (hot rolled coil,
cold rolled coil, aluminum coil and color-coated steel) per year.
"All our steel production will be sold on the local market," Tae said.
Separately, Ansari Bukhari, director general of metal, textile and
miscellaneous machinery at the Industry Ministry, said that Indonesia
imported about one million tons of steel per year.
"Daewoo's production will reduce our import needs by more than 20
percent," he said, adding that the government would continue to promote
the production of steel locally so as to decrease local industry's
dependence on imports.
Currently, local steel requirements stand at about 3.5 million tons per
year, while local production only 2.5 million tons per year. Two
million of this is produced by PT. Krakatau Steel.
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