"The Korea Economic Daily" reported on September 26 that Korean steel giant POSCO will jointly build a building in Indonesia with China Tsingshan Holding Group Stainless steel factory. This move means that Posco is shifting its focus of stainless steel production from China to the Southeast Asian market with rapidly growing demand.

According to people familiar with the matter, the new factory will be located in the Morrovalli Industrial Park on Sulawesi, with an annual designed production capacity of 2 million tons, almost equivalent to the total stainless steel production in South Korea.

Under the agreement between the two parties, Posco will acquire 44.12% of PT Xinheng Metal Indonesia, which is controlled by Tsingshan's PT Makmur International Investment PTE, which will retain the remaining 55.88% of the shares. In the future, the two parties will jointly manage the joint venture and promote factory construction.

The new factory may start construction as soon as next year, and the investment in Posco iron is expected to exceed 1 trillion won (about 708 million US dollars).

This investment plan follows Posco's sale of its stainless steel factory in China with an annual production capacity of 1.1 million tons to Qingshan in July this year, highlighting its strategic transformation to position Southeast Asia as the core area of stainless steel production in the future.

At present, Posco has operated a comprehensive steel plant called "Karakato Posco" in Indonesia. The plant was put into production in 2013 with an annual production capacity of 3 million tons.

Indonesia is accelerating infrastructure construction and promoting the plan to relocate the capital to Nusantara, a series of projects are driving the demand for stainless steel in building facades, industrial pipelines and factories.

At the same time, Indonesia has the world's largest nickel reserves, and nickel is a key raw material for stainless steel production.

Industry insiders pointed out that the combination of strong demand and abundant resources has made Indonesia an ideal destination for Posco's global expansion.

More info: https://www.sinosteel-pipe.com/en/two-major-steel-giants-in-china-and-korea-jointly-build-a-stainless-steel-factory.html