Krakatau Steel Expects to Realize 2.8 Million Tons of Steel Sales in 2018

INDUSTRY.co.id - Jakarta - Steel sales volume of PT Krakatau Steel Tbk (KRAS) is targeted to reach 2.8 million tons in 2018. That means the target is 40% higher than in 2017 of 2 million tons.

"The increase in sales volume aims to anticipate the increase of steel demand in the domestic market," said Suriadi Arif, Senior Vice President of Corporate Secretary of KRAS in Jakarta, Wednesday (24/01/2018).

Suriadi said the steel demand in the domestic market is expected to continue to increase an average of 1 million tons per year. Meanwhile, steel prices are now beginning to improve.

Therefore, according to Suriadi, the company is optimistic that it will be able to improve its performance gradually. That's because of the significant increase in steel prices in the last two years.

"The price of steel has decreased during the period 2011-2015. Nevertheless, the price of domestic CFR HRC in December 2017 has reached US $ 562 per ton, jumped 260% compared to December 2015 which was only US $ 216 per ton," said Suriadi.

Nevertheless, according to Suriadi, the high cost of gas and electricity energy in steel production activities is still burdening the cost of Indonesian domestic steel production.

Therefore, Suriadi revealed, to maintain the stability between the cost of production with the price of steel sales to local and global markets, Krakatau Steel implemented a make or buy strategy.

Suriadi explained, the strategy is implemented by running a factory producing semi-finished steel products. Then it is combined with the pattern of procurement of imported semi finished product raw materials that are highly competitive.

With the implementation of such operations, Suriadi said, KRAS management is optimistic that the local steel producer status of the State-Owned Enterprises (SOEs) can continue to post profit in 2018. (Abraham Sihombing)