The Korea Economic Daily reported on September 26 that South Korea's steel giant POSCO will jointly build a stainless steel plant with China's Tsingshan Holding Group in Indonesia. This move indicates that POSCO is shifting the focus of its stainless steel production from China to the Southeast Asian market, where demand is growing rapidly.
According to informed sources, the new factory will be located in the Morowali Industrial Park on Sulawesi Island, with a designed annual production capacity of 2 million tons, which is almost equivalent to the total stainless steel output of South Korea.
According to the agreement between the two parties, POSCO will acquire 44.12% of the shares of PT Xinheng Metal Indonesia, which is controlled by PT Makmur International Investment PTE under Aoyama. The latter will retain the remaining 55.88% of the equity. In the future, both sides will jointly manage this joint venture and promote the construction of the factory.
The new factory is expected to start construction as early as next year, and POSCO's investment is projected to exceed 1 trillion won (approximately 708 million US dollars).
This investment plan follows POSCO's sale of its stainless steel plant in China with an annual capacity of 1.1 million tons to Aoyama in July this year, highlighting its strategic transformation to position Southeast Asia as the core area for future stainless steel production.
At present, POSCO is operating a comprehensive steel plant named "POSCO Krakatoa" in Indonesia. The plant was put into operation in 2013 with an annual production capacity of 3 million tons.
Indonesia is accelerating infrastructure construction and advancing the plan to move the capital to Nusantara. This series of projects is driving the demand for stainless steel in building facades, industrial pipelines and factory construction.
Meanwhile, Indonesia has the world's largest nickel reserves, and nickel is a key raw material for stainless steel production.
Industry insiders point out that the combination of strong demand and abundant resources makes Indonesia an ideal destination for POSCO's global expansion.
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