REPUBLIKA.CO.ID, CILEGON -- PT Krakatau Posco (KS Posco) has supplied its first production of steel slab to the publicly traded state-owned steel maker PT Krakatau Steel (KS).
KS Posco is a joint venture between KS and South Korea's steel giant Posco with factory coming on stream in Cilegon, Banten province, by the end of 2013.
"The first production is part of 80,000 tons of slabs to be supplied by KS Posco to KS in March, 2014," Krakatau Steel President Irvan K Hakim said here on Sunday.
Krakatau Posco produces slabs that will enable KS to fully utilize its production facilities, Irvan said.
Irvan said Krakatau Steel will receive at least 1 million tons of steel slabs a year or 50 percent of its requirement of 2.1 million tons of the material in 2014.
"The slab supply from Krakatau Posco would improve the competitiveness of the company (KS) and flexibility in meeting orders, reduce production cost and speed up delivery," he said.
In addition, the availability of slab supply will also save the company from the problem of rupiah fluctuation against the US dollar.
He said rupiah fall could serve a big blow to the country's steel industry because of far shorter lead time order.
He said the business synergy (between KS and KS Posco) would push development of industrialization in the country as steel is vital in various industries.
Infrastructure would also grow as steel industry would need infrastructure such as energy, industrial water, port and industrial estate, he said.
Through a number of subsidiaries, Krakatau Steel has continued to build supporting infrastructure to contribute to its expansion and to increase steel production.
Expansion has been made such as through PT Krakatau Bandar Samudera, which has commissioned its port facilities with quays 3, 5 and 6 increasing the loading and unloading capacity of the port to 25 million tons per year making it the largest bulk port with deepest port basin in Indonesia.
An energy subsidiary PT Krakatau Daya Listrik improved its production efficiency with the addition of Combined Cycle Power Plant and together with Posco Energy established a joint venture company PT Krakatau Posco Energy, increasing its energy production capacity to 720 megawatts.
The industrial water holding capacity of its dyke has been increased to 5 million square meters through PT Krakatau Tirta Industri, which has expanded its industrial water supplying capacity to 2,000 liters per second.
Its industrial estate subsidiary PT Krakatau Industrial Estate Cilegon, plans to expand its estate with an addition of 500 hectares.
PT Krakatau Posco is 70 percent owned by Posco and 30% by PT Krakatau Steel. The KS share is to be expanded to 45 percent in 2015.
PT Krakatau Posco started commercial operation by the end of 2013 officially commissioned by President Susilo Bambang Yudhoyono.
It is located at Krakatau Steel Industrial Estate with complete supporting facilities.
In the first phase PT Krakatau Posco has a production capacity of 3 million tons of slabs per year.
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