South Korean steelmaker Posco will spend $3.5 million in Indonesia over the next five years to build its second steel furnace, in partnership with state-owned PT Krakatau Steel.
The news came out during a visit to South Korea by Indonesian President Joko Widodo, who met with executives at a number of top conglomerates to boost investment.
Posco already owns a steel furnace in Cilegong on Java Island, as part of its majority stake in the PT Krakatau-Posco joint venture with PT Krakatau Steel, which has a production capacity of three million tons of steel and sheet metal processing per year.
The new furnace will double the joint venture’s production capacity to six million tons per year, in anticipation of rising demand from key manufacturing sectors, including the automotive sector.
Separately, Posco said it had raised US$1 billion in a foreign bond issue to bolster its cash flow, including three-year bonds worth US$700 million and five-year bonds worth US$300 million.