The Biggest Steel Factory in Asia to Build in Indonesia

Steel Pipe - Photo by Hebei

JAKARTA (TheInsiderStories) – The biggest steel plant in Asia to build in Indonesia, said Deputy Governor of Central Java Heru Sudjatmoko was quoted by Antara on Tuesday (24/07). He said, China-based steel producer Hebel Bishi Steel Group has invested US$2.54 billion to build steel plant in Kendal regency, Central Java.

In 2015, Hebei has announced to build a steel rolling factory and power plant with a total investment of $4.5 billion in Indonesia. Sudjatmoko explained that this is the company’s first phase investment in Kendal, covering three million tons of steel, 2.4 million tons cooking coal, 270 megawatt power plant, supporting facilities such as dock with a capacity of 100 deadweight.

In order to realize this investment, Hebei, based in Tangshan, China, will partner with local partners PT Seafer Industrial Estate. The largest steel mill in Asia is expected to be able to absorb around 10 thousand workers.

“Hebei provides guarantees to the government to prioritize residents around the steel plant site in Patebon Subdistrict, Kendal District, to become a workforce. It plans to operate in 2019 or at least 2020,” he said.

The signing of the construction of the steel plant was carried out between the two companies in Beidahe, Hebei, China, witnessed by Indonesian Ambassador for China Djauhari Oratmangun.

“Central Java is one of backbones of Indonesia`s economy. So, when Chinese business wants to invest, we are ready to assist until it is done,” Sudjatmoko noted by adding that the Central Java government had promised the Chinese business sector to ease investment permit procurement.

Director of Hebei Industry Group Deng Ji expressed his willingness to make their investment into real soon in Seafer Kendal industry complex. He stated that Hebei`s investment in Central Java is one of pilot projects of Chinese “One Belt One Road” initiative in Indonesia.

President Director of PT Seafer Kawasan Industry Harry Sudarwo, claimed that his company had allocated a 700-hectare land for the investment project. “The land had been prepared and permit is already in our hand,” he said.

Indonesia and China has signed two memorandum of understanding and five contracts with worth $23.3 billion on April 13 in Beijing, China. The agreement is part of China’s Belt and Road Initiative, an ambitious road, rail and construction project spanning dozens of countries across Asia, Africa and Europe.

The contract was signed by companies from both countries and consists of :

  1. Two projects with total investments $17.8 billion to build a hydropower plant on the Kayan river, North Kalimantan
  2. A $700 million contract to develop facilities to convert coal to dimethyl-ether into gas
  3. Joint venture power development in Bali, worth $1.6 billion.
  4. The development of steel smelter worth of $1.2 billion.
The countries also signed the agreement on the development of the car and electric motor in Tanah Kuning Mangkupadi Industrial Park, North Borneo. Coordinating Minister Luhut Binsar Panjaitan said, there is a potential investment up to $64 Billion in Indonesia.
The long-term target of government in responding Belt & Road Initiative launched by Chinese President Xi Jinping in September and October 2018. As background, focus on the idea of ​​BRI, among others, investment in infrastructure, construction, construction of railroads, highways, automotive products, real estate, power generation, iron and steel.
Some estimates that BRI as mega infrastructure projects and investment in this century involving 68 countries. When converted, this means that there is 65 percent of the population is involved directly or indirectly in the Chinese government’s mega project.

Written by Staff Writer, Edited by Linda Silaen, Email: