JAKARTA - Nippon Steel & Sumitomo Metal Corp. will step up local production of automotive flat steel products in Indonesia to meet growing demand from Southeast Asia’s largest auto market.
PT Krakatau Nippon Steel Sumikin — the Japanese steelmaker’s joint venture with the state-backed PT Krakatau Steel — will gradually replace imported sheet steel from Japan with products from a local plant, the joint venture’s president, Naomasa Arita, said at a recent plant opening ceremony in Cilegon, Banten province.
The move comes amid concerns in Indonesia over the rapid rise in imports of steel products. Arita said the start of his firm’s full-fledged operations in Indonesia will contribute to localizing steel production.
The Tokyo-based firm owns 80 percent of the joint venture, while the remaining 20 percent is owned by the Indonesian steelmaker. It supplies steel products to Japanese automakers operating in Indonesia.
The local arm has built a galvanizing, annealing and processing line to manufacture anti-corrosion and high-strength steel for automobiles, with annual production capacity of 480,000 tons.
It currently produces about 10,000 tons a month, Arita said, adding the joint venture can increase local procurement of slabs and ramp up output of processed products once a blast furnace of the Indonesian partner goes into operation.
Nippon Steel runs automotive flat steel production bases in Brazil, China, India, Mexico, Thailand and the United States.