KRakatau to build steel factory at a cost of Rp 5.92 trillion.
State-owned steel maker PT Krakatau Steel Tbk (Persero) will build a steel factory with the technology of blast furnace at a cost of Rp 5.92 trillion (US$ 697 million). The factory to be built in Cilegon, Banten, will have a production capacity of 1.2 million tons. It is planned to reduce the production cost of slabs and imports of basic material, and to utilize local basic material such as iron ores and coal. Construction of the factory is expected to start in before the end of this year to be completed in the second quarter of 2014. Krakatau Steel planned to team up with Metallurgical Corporation of China Ltd (MCC) CERI to build the project, said Andi Soko Setiabudi, a deputy director of the country's largest steel maker. Krakatau Steel and the Chinese construction company have signed the contract to build the project, Andi said. The company will seek a loan of around Rp5 trillion from Chinese banks to finance the project, he said, adding the remaining fund for the cost will be put up by the company. Meanwhile, the US$ 6 billion project between KS and South Korea's Pasco is still in the phase of preparing the land for the integrated steel plant in Cilegon, Banten. The land preparation alone has cost Rp 600 billion, Krakatau President Fazwar Bujang said, adding civil work will start early next year. The first phase of construction of the factory will begin only in 2013.
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|Title Annotation:||CORPORATE NEWS IN BRIEF|
|Publication:||Indonesian Commercial Newsletter|
|Date:||May 1, 2011|
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