Krakatau Steel seeking strategic alliance

Jakarta (Antara News) - State-owned steel company PT Krakatau Steel is considering a strategic alliance with a number of world steel companies to improve its performance particularly in supplying iron ore.

The company`s president director, Daenulhay, at a press conference in Cilegon on Monday said Krakatau Steel would explore the possibility of developing a strategic alliance with four world companies and with domestic steel producers.

The four international companies it is considering are Essar International Ltd (India), Bao Steel, Ispat Ltd and Nanjing Iron Steel Co. Ltd, he said.

He said the alliance was expected to be realized next year before the company conducted an initial public offering in 2009.

"The alliance is also aimed at raising the corporate value before it is being privatized," he said.

He said the alliance was also needed to meet the company`s production target of 20 million tons in 2020 from the currently two million tons a year.

He said it was also needed to secure raw materials supply which had been increasing.

In the mid term between 2008 and 2013 the alliance was expected to complete the construction of an iron manufacturing plant with a capacity of 8.2 million tons.

Daenulhay also hoped the government would impose an export levy on iron ore to reduce exports of the raw material.

"The policy must be implemented next year to assure domestic raw material supply," he said.

The company`s finance director, Fazwar Bujang, meanwhile reported that until September this year the company booked a pre-taxed profit of Rp440.165 billion or Rp292.198 billion after tax.

He said the company expected to get a net profit of Rp368.735 billion by the end of the year.(*)
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