Krakatau Steel to build $400m hot strip mill

PT Krakatau Steel, the country?s largest steelmaker is conducting a feasibility study on the company's plan to build a new hot strip mill.

The company plans spend up to US$400 million for the project next year.

Krakatau had yet to pick a location for the new facility but the firm expected to develop in a new area, in a possible exchange of a 40-hectare plot which it was ready to release to Asia?s second-largest petrochemical producer, Honam Petrochemical Corp.

?We expect the new mill will be up and running in 2015 when it is set to process around 1 million tons of steel,? president director Irvan Kamal Hakim said as quoted by The Jakarta Post.

A hot strip mill reheats and rolls slab steels into hot rolled coils and plates, which are widely used for ship buildings, pipes, general structures and other applications.

The biggest share of the output from the new mill will go to the domestic market, which sees significant demand for steel as the economy grows, Irvan said.

At present, Krakatau?s hot strip mill has a capacity of around 2.4 million tons per year, while its overall rolling capacity is around 3.25 million tons per year, generated by a set of mills, including hot strip mill, wire rod mill, bar mill and section mill.

The planned hot strip mill is expected to help the firm to upgrade its total rolling capacity to 4.25 million tons per year.(*)