SEOUL, KOREA - At Cilegon, a city 100 kilometers west of Indonesia's Jakarta, Krakatau POSCO has begun producing steel slabs and steel plates in earnest. Min Joong-gi, head of production at the steel works, said, "We have had difficulties of continuing production for 60 days due to defects in important parts. But now we overcame the problem and are producing 8,300 tons of molten iron a day."

 

 

 

Krakatau POSCO is a 70:30 joint venture between Korea's largest steel maker POSCO and Indonesia's state-run steel maker Krakatau and is the first integrated steel mill with a blast furnace in Southeast Asia. 

Min Kyung-zoon, president of Krakatau POSCO, said, "Based on the cost advantage in terms of cheap iron ore prices and low labor cost, we will try to become a leading steel maker in Southeast Asia."

 

The steel products produced in the mill is about 2 dollars lower per ton than those produced in Korea's Pohang. But it is about 10 dollars higher than that from Gwangyang, the world's most efficient steel mill.

 

Yoon Duk-il, Krakatau POSCO's head of finance, said, "Given the difference between Korean mammoth steel works with annual output of 38 million tons and the 3-million-ton facility here, our cost structure is highly competitive. The per-ton price of iron ore procured in Indonesia is 17 dollars lower than that from Brazil. That means we can gain more competitve edge as we produce more."