Mittal’s USD1.5 billion investments
Started out his steel business by setting up PT Ispat Indo in Surabaya, East Java 23 years ago, ML Mittal’s Arcelor Mittal (an amalgamation of Arcelor & Mittal) is currently the No.1 steel producer in the world with combined production capacity of 130 million tones, represent 10% of world's capacity. Now, he is planning significant investment in Indonesia up to USD1.5 billion in the next five years.
Mittal executive told the press about the investment after a meeting with VP Jusuf Kalla, who is in a state visit to India. Mittal is not alone. Tata Group and Essar also pledged similar interests to invest in the country’s ailing steel industry. While Mittal knows well the country, there is no guarantee that he would definitely invest USD1.5 billion here. In the next two months they’ll collect data to be followed by feasibility study (few months), and by June the giant will make the final decision.
Nine years ago, Mittal rocked Indonesian politic when Tanri Abeng (that time minister for state-owned enterprises under Soeharto & BJ Habibie administration) quietly signed a MoU to sell 51% shares of PT Krakatau Steel, Indonesia’s largest steel producer to Ispat. But Tanri faced strong opposition from the state-owned steel company’s board of commissioners, directors, and workers union.
As reported by Financial Times in June 1998, Soeharto administration had already agreed to sell 51% of Krakatau Steel to Ispat as early as May 7, two weeks before Soeharto’s downfall for around USD400 million without seeking additional bids.
Pressures mounted toward Tanri to cancel the deal. Tanri, a long-time friend of Mr Mittal, defended his decision saying, “As the shareholder’s representative, I have every rights to do that.”
But with the downfall of Soeharto, the deal was cancelled accordingly. Tanri is survived. He is the president commissioner of PT Telkom Tbk, lot healthier than Krakatau, and one of key supporters of Kalla.
There is huge difference between Ispat & Krakatau Steel in nine years time. Ispat/Mittal has become No.1 in the world, while Krakatau only No.1 in Indonesia with stagnant 2 million tones/year of capacity.
Now, both companies are on expansion mood. I don’t need to put a note on Mittal’s worldwide expansion. But Krakatau has several major projects to come. The largest is an iron ore plant to be built in Kalimantan with USD450 million investments. The company has signed a MOU with Al Tuwairqi, Saudi Arabia for the project last year during MSOE Sugiharto’s road show to Middle Eastern countries.
Are these guys, Al Tuwairqi & Mittal, looking from the same project with Krakatau Steel with different entry gates?
No idea. But the most important thing, they could really invest such big amount to create more jobs and strengthen our industrial structure.
READ MORE!!!
Mittal executive told the press about the investment after a meeting with VP Jusuf Kalla, who is in a state visit to India. Mittal is not alone. Tata Group and Essar also pledged similar interests to invest in the country’s ailing steel industry. While Mittal knows well the country, there is no guarantee that he would definitely invest USD1.5 billion here. In the next two months they’ll collect data to be followed by feasibility study (few months), and by June the giant will make the final decision.
Nine years ago, Mittal rocked Indonesian politic when Tanri Abeng (that time minister for state-owned enterprises under Soeharto & BJ Habibie administration) quietly signed a MoU to sell 51% shares of PT Krakatau Steel, Indonesia’s largest steel producer to Ispat. But Tanri faced strong opposition from the state-owned steel company’s board of commissioners, directors, and workers union.
As reported by Financial Times in June 1998, Soeharto administration had already agreed to sell 51% of Krakatau Steel to Ispat as early as May 7, two weeks before Soeharto’s downfall for around USD400 million without seeking additional bids.
Pressures mounted toward Tanri to cancel the deal. Tanri, a long-time friend of Mr Mittal, defended his decision saying, “As the shareholder’s representative, I have every rights to do that.”
But with the downfall of Soeharto, the deal was cancelled accordingly. Tanri is survived. He is the president commissioner of PT Telkom Tbk, lot healthier than Krakatau, and one of key supporters of Kalla.
There is huge difference between Ispat & Krakatau Steel in nine years time. Ispat/Mittal has become No.1 in the world, while Krakatau only No.1 in Indonesia with stagnant 2 million tones/year of capacity.
Now, both companies are on expansion mood. I don’t need to put a note on Mittal’s worldwide expansion. But Krakatau has several major projects to come. The largest is an iron ore plant to be built in Kalimantan with USD450 million investments. The company has signed a MOU with Al Tuwairqi, Saudi Arabia for the project last year during MSOE Sugiharto’s road show to Middle Eastern countries.
Are these guys, Al Tuwairqi & Mittal, looking from the same project with Krakatau Steel with different entry gates?
No idea. But the most important thing, they could really invest such big amount to create more jobs and strengthen our industrial structure.
Labels: Krakatau
READ MORE!!!
posted by yosef at 1:27 AM
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