South Korean steelmaker Posco will spend US$3.5m in Indonesia over the next five years to build its second steel furnace, in conjunction with state owned PT Krakatau Steel.
The news emerged during a visit to South Korea by Indonesian president Joko Widodo who met executives at a number of top conglomerates to drum up investment.
Posco already has a steel furnace in Cilegong on Java island, as part of its majority-owned PT Krakatau-Posco joint venture with PT Krakatau Steel, which has a production capacity of three million tons of steel and steel plate 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 automotive.
Separately, Posco said it had raised US$1bn in an overseas bond issue to strengthen its cashflow, including three year bonds worth US$700m and five year bonds worth US$300m.