A power plant owned by a subsidiary of Krakatau Steel - Photo by PT PP Tbk
JAKARTA (TheInsiderStories) PT Krakatau Steel Tbk (IDX: KRAS) to run two strategic projects in this year as part the Indonesian steel producer’ effort to enter downstream business and to reduce the production costs, said the chief executive on Tuesday (01/15).
According to the CEO Silmy Karim, the first project is the Blast Furnace Complex in the area of ​​55 hectares joined with Capital Engineering & Research Incorporation Ltd., from China and its unit PT Krakatau Engineering (PTKE). He said, with the new plant, steel production costs will decrease by US$50 per ton.
“The Blast Furnace facility is a coal-based technology. So it will increase the flexibility of energy use and reduce dependence on natural gas, which is projected to experience an increasing price in the future,” said Karim.
In the Blast Furnace complex, KRAS has build Sinter Plant with a capacity 1.7 million tons per year, Hot Metal Treatment Plant with a capacity of 1.2 million tons per annum, and Coke Oven Plant with a capacity of 555 thousand tons in a year. As a support, there is a Raw Material Handling that can accommodate 400,000 tons per year.
Another project, an addition of hot sheet steel capacity to supply Hot Rolled Coil (HRC) with a capacity of 1.5 million tons per annum and is targeted to be complete in April 2019. Karim said, HRC managed to record a sales volume in November 2018 which amount 189,702 tons from previous month 127,005 tons.
Until September 2018 (9M), Krakatau Steel has a 40 percent of HRC market share of total national output. At the same period, steel maker’s sales recorded 1.59 million tons, up 14.24 percent compared to previous year 1.39 million tons.

The Southeast Asia’s largest economy, is expecting size-able demand for steel followed the development of infrastructure projects, shipbuilding and the automotive industry in the coming years.

Domestic steel consumption is expected to surge by between 6 per cent and 9 per cent this year from initially around 10 million tons a year, according the Indonesian Iron and Steel Industry Association.

At present, the country imports between 35 percent and 40 percent of the total annual demand for steel due to limited capacity in the local industry.

Written by Staff Editor, Email: theinsiderstories@gmail.com