Krakatau units fail to get tax holiday

IDX-listed steel maker PT Krakatau Steel Tbk's new subsidiaries PT Krakatau Nippon Steel Sumikin and PT Krakatau Osaka Steel have failed to obtain tax holiday as the Ministry of Industry considered their projects to have limited impact on the economy, Kontan reported Thursday.

The paper quoted Head of Policy and Investment Climate unit at the ministry Haris Munandar as saying that Krakatau Nippon, for instance, which plans to build steel products for the automotive industry imports its raw material requirement and its impact to the economy is limited to the auto industry.

As previously reported Krakatau has set up a joint venture with Nippon to build a 480,000-ton per annum steel plant in Cilegon, Banten, to produce cold-rolled steel and hot dip galvanized steel products for the auto industry. The plant,20 percent owned by Krakatau and 80 percent Nippon, will start operation mid 2017.

Meanwhile, Krakatau is teaming up with Osaka to set up a 500,000-ton per year plant in Cilegon to produce steel products for the construction sector. The plant, 80 percent owned by Osaka and the remainder Krakatau, will start operation in 2016.(*)