Krakatau begins construction of second hot strip mill

IDX-listed steel maker PT Krakatau Steel Tbk is expected to implement ground-breaking today for the construction of a second hot strip mill with annual capacity of 1.5 million tons per year, Kontan reported on Monday.

The paper quoted Krakatau Finance Director Tambok P. Setyawati as saying that the US$381.8 million plant is targeted to be completed in the first semester of 2019.

Krakatau has obtained $260.05 million loan from Germany?s Euler-Hermes to help finance the construction of the second hot strip mill that would boost the company?s production capacity to 4.65 million tons per year.

As has been previously reported by this portal, Krakatau is scheduled to hold a shareholders meeting on August 26 to get approval for a planned rights issue, the proceeds of which will be among others used to help finance the construction of the second hot strip mill and a 1x150 MW coal-fired power plant.

Elsewhere, Tambok said Krakatau will set up a coal blast furnace by the end of this year that would hopefully cut down Krakatau?s production cost to $58.3 per ton. (*)