"This is part of the Master Plan for Indonesian Economic Development and Expansion (MP3EI) to speed up industrialization in Indonesia," he said when inspecting the Krakatau Posco steel plant construction project in Cilegon, Banten province, in West Java here on Wednesday.
He noted that the MP3EI is a large-scale infrastructure development project in Indonesia and this project needs products from quality steel industries.
He added that the steel industry also could help support development of the national defense sector.
He said weapons and other defense equipment industries rely heavily on steel supplies from existing industries.
President Yudhoyono was accompanied by several cabinet ministers during the inspection, including Dahlan Iskan, the state enterprises minister.
Before inspecting the project, President Yudhoyono was briefed by PT Krakatau Posco, president director Kim Dong-ho, about the plant operations. The company is a joint venture between Indonesia's state-owned steel company PT Krakatau Steel and Pohang Steel and Iron Corporation (Posco) from South Korea.
Posco holds 70 per cent of the shares in P Krakatau Posco while PT Krakatau Steel has 30 per cent, but within a year PT Krakatau Steel`s shares will reach 45 per cent while Posco's fall to 55 per cent.
The investment in the project is worth Rp38 trillion during the construction stage and Rp31 trillion in the production stage.
PT Krakatau Steel president director Fazwar Bujang said the production capacity of the company is now 3.15 million tons per year. He estimated the capacity could be increased to 4.52 million tons per year.
Krakatau Posco, meanwhile, is expected to produce three million tons of steel products per year. In the next investment stage the capacity is expected to reach six million tons per year.
(F008/H-YH)
Editor: Ade P Marboen
Copyright © ANTARA 2012
