Ispat Indo set to invest in upstream steel industry

World's leading steel producer Arcelor Mittal, through its East Java-based unit PT Ispat Indo has undertaken a feasibility study to build an upstream steel plant with an estimated investment of US$600 million, Bisnis Indonesia reported on Wednesday.

The company is now looking for lands in Lampung and Banten for a possible location of the new plant.

The company?s President Director, Mr. Banka, said that Ispat Indo still refines the project plan and economic scale and the investment would be realized soon if production and commercial study matches the economic scale.

"We have not been able to disclose exactly whether the investment would be directed to the upstream, midstream or downstream. If the potential is great, we would come into the upstream. However, if the opportunity is small, we would invest in a small scale,? he said.

However, a government official who is well informed about Ispat's plan said that Ispat Indo is almost certain to realize the development of an upstream steel plant which will be integrated with additional investment in power plants.

"If Ispat Indo has planned the investment, the plant should have a production capacity of one million tons per annum so as to meet the scale of economy and the factory would require at least a 200-MW power plant. (*)