October 11, 2008

Krakatau Steel seeking strategic alliance

ANTARA News reported that PT Krakatau Steel is considering a strategic alliance with a number of world steel companies to improve its performance particularly in supplying iron ore.

Mr Daenulhay president director of Krakatau Steel at a press conference in Cilegon on said that Krakatau Steel would explore the possibility of developing a strategic alliance with four world companies and with domestic steel producers. He said that the four international companies it is considering are Essar, BaoSteel, Ispat and Nanjing Iron Steel Co Ltd.

Mr Daenulhay said that “The alliance is expected to be realized next year before the company conducted an initial public offering in 2009. The alliance is also aimed at raising the corporate value before it is being privatized."

He said the alliance was also needed to meet the company’s production target of 20 million tons in 2020 from the currently two million tons a year. He said it was also needed to secure raw materials supply which had been increasing. In the mid term between 2008 and 2013 the alliance was expected to complete the construction of an iron manufacturing plant with a capacity of 8.2 million tonnes.