One of the major Indonesian steelmakers, PT Krakatau Steel, has completed debt restructuring of $2.2 billion, according to an official statement on January 29. According to the company’s CEO Silmy Karim, this is the biggest debt restructuring ever in Indonesia. It involved 10 national banks and “we got cost savings from restructuring of Krakatau Steel’s nine-year debt of $685 million,” he said.
As a result, the producer is more confident as regards its operating and financial performance in 2020. PT Krakatau Steel has a plan to increase its production rate to 3.5 million mt per year and, with the record high output of HRC in October, this is quite possible, according to the steelmaker. As SteelOrbis reported earlier, PT Krakatau Steel posted a record monthly production of 203,315 mt in October, which is equivalent to an annual rate of 2.4 million mt. This quarter, the manufacturer is going to launch its second hot strip mill with a 1.5 million mt per year capacity.
At the same time, PT Krakatau Steel claims that it needs the help of the authorities to curb imports, which significantly impacted local steel mills’ operations. As of September 2019, Indonesia’s steel imports amounted to 5 million mt and are expected to reach 6.7 million mt for the whole year, up 7.5 percent compared to 2018. Import inflow led to a drop in capacity utilization rate in Indonesia to 43 percent in 2019, according to Silmy Karim.
