Japanese banks provide $220m loans for KNSS

By Ruli Setiawan

The Japan Bank for International Cooperation (JBIC) has recently signed a loan agreement amounting up to US$22 million (JBIC portion) with PT Krakatau Nippon Steel Sumikin (KNSS), an Indonesian subsidiary of Nippon Steel & Sumitomo Metal Corp (NSSMC).

JBIC said in a recent statement that the loan is co-financed with other Japanese banks including Sumitomo Mitsui Banking Corporation (lead arranger), Mizuho Bank, Ltd., Mitsubishi UFJ Trust and Banking Corporation, and Sumitomo Mitsui Trust Bank, Limited, with a total co-financing amount of $220 million.

This loan is intended to provide the necessary funds for the manufacturing and sales of cold-rolled, hot-dip galvanized, and galvanized steel sheets for automobiles (production capacity: 480 thousand tons/year) conducted by KNSS, which was jointly established by NSSMC and a state-owned Indonesian steel manufacturing company, PT Krakatau Steel Tbk.

Demand for high-quality automotive steel sheets in Indonesia is expected to increase in line with the automobile market which is expected to enjoy continued growth backed by the country?s economic growth. Given such circumstances, NSSMC aims to respond promptly and appropriately to the needs of its customers in Indonesia, who are mainly Japanese auto manufacturers, by setting up a state-of-the-art automotive steel sheet production line and producing locally through its joint venture with Krakatau.

Editing by Reiner Simanjuntak