POSCO Expands Steel Business in Indonesia... Also Participates in New Capital Project

Agreement with Indonesian Government and State-Owned Steel Company Krakatau Steel
3.5 Billion USD Joint Investment... Establishment of Krakatau Posco's 2nd Blast Furnace and Cold Rolling Plant

POSCO signed a Memorandum of Understanding (MOU) on the 28th at Lotte Hotel in Sogong-dong, Seoul, with the Indonesian government and Indonesia's state-owned steel company Krakatau Steel to expand steel production capacity and participate in the construction project of Indonesia's new capital city. From left to right in the photo: Joko Widodo, President of Indonesia; Silmy Karim, President of Krakatau Steel; Bahlil Lahadalia, Minister of Investment of Indonesia; Kim Hak-dong, Vice Chairman of POSCO; Eric Thohir, Minister of State-Owned Enterprises of Indonesia.

[Asia Economy Reporter Oh Hyung-gil] POSCO is expanding its steel business in Indonesia and will also participate in the new capital city construction project.

On the 28th, POSCO signed a Memorandum of Understanding (MOU) at Lotte Hotel in Sogong-dong with the Indonesian government and Indonesia's state-owned steel company Krakatau Steel regarding the expansion of steel production capacity and participation in the new capital city construction project in Indonesia.

The signing ceremony was attended by Indonesian President Joko Widodo, who is visiting Korea, Indonesian Minister of Investment Bahlil Lahadalia, Indonesian Minister of State-Owned Enterprises Erick Thohir, POSCO Vice Chairman Kim Hak-dong, and Krakatau Steel President Silmi Karim.

According to the agreement, POSCO and Krakatau Steel will jointly invest $3.5 billion (approximately 4.6 trillion KRW) over the next five years to establish a second blast furnace and a cold rolling mill at Krakatau POSCO.

Indonesia Krakatau Posco

Krakatau POSCO is an integrated steel mill jointly established by POSCO and Krakatau Steel, located in Cilegon, 100 km northwest of Jakarta, the capital of Indonesia. Currently, it operates one blast furnace with an annual capacity of 3 million tons and a heavy plate mill, and plans to add a hot rolling mill through in-kind contributions from Krakatau Steel.

The two companies plan to build an additional blast furnace to increase annual crude steel production to over 6 million tons and establish automotive steel sheet production facilities.

Additionally, POSCO will participate in the new capital city construction project in Indonesia. Group affiliates, including POSCO Engineering & Construction, which successfully developed Songdo International City, are also considering participation.

The Indonesian government has agreed to support administrative procedures such as permits related to the steel business expansion including the new blast furnace at Krakatau POSCO and the new capital city construction project, as well as provide investment incentives including tax benefits.

Silmi Karim, President of Krakatau Steel, said, "With POSCO's excellent technology and the Indonesian government's active support, Krakatau POSCO has been able to establish itself successfully. Through this agreement, we will strengthen our partnership and actively respond to the rapidly growing industrial and steel demand in Indonesia."

POSCO Vice Chairman Kim Hak-dong said, "With the cooperation of the Indonesian government and Krakatau Steel, we are building the second blast furnace at POSCO's first overseas integrated steel mill. We will strive for the success of Krakatau POSCO's steel business, the realization of the 10 million ton steel cluster vision in Cilegon, Indonesia, and the successful construction of Indonesia's new capital city."

This content was produced with the assistance of AI translation services.