According to local media reports in South Korea, South Korean steel producer POSCO and Chinese stainless steel producer Tsingshan Holding Group have signed a deal to construct a stainless steel plant in the Morowali Industrial Park on Sulawesi island, Indonesia. The new mill will have an annual capacity of 2 million mt, nearly equal to South Korea’s entire stainless steel production capacity.
Project to be carried out by joint venture
Construction of the new facility could begin as early as next year, with POSCO’s investment surpassing KRW 1 trillion ($708.3 million).
POSCO will acquire a 44.1 percent stake in PT Xinheng Metal Indonesia from Tsingshan’s affiliate, PT Makmur International Investment PTE, which will keep the remaining 55.88 percent. The two companies will co-manage the new joint venture that will oversee the plant’s construction and operations.
POSCO focuses on Southeast Asia
This move follows POSCO’s sale of its 1.1 million mt stainless mill in China to Tsingshan in July, signaling a shift in strategic focus, as previously reported by SteelOrbis. By realigning its assets, POSCO is positioning Southeast Asia as its new stainless steel production base. The steelmaker has already been operating Krakatau POSCO, an integrated steel mill with a capacity of 3 million mt, since 2013 in Indonesia. The new stainless project will further strengthen the company’s footprint in the region.