Indonesia’s biggest steel maker says Q1 sales drop 25pct

PT Krakatau Steel, Indonesia’s biggest steel maker, said on Tuesday sales fell up to 25 percent to 320,000 tonnes in the first three months of this year because of slowing demand.

‘Global economic weakness has affected steel demand in the domestic market,’ Fazwar Bujang, Krakatau Steel’s president director said. ‘But we see demand is improving after March as some government infrastructure projects have started.’

The government projects include the construction of an oil pipeline in Sulawesi, worth $40 million, and the construction of three fertiliser factories at PT Petrokimia Gresik in East Java valued at $60 million, he said.

Krakatau Steel has said it expects sales of 15.8 trillion rupiah ($1.51 billion) in 2009, down from 19 trillion rupiah in 2008.

Global steel prices continue to fall after hitting a record high early last year as the financial crisis had slowed construction projects globally and dampened demand for steel.

Krakatau Steel has said it will focus its sales on steel products which are needed in government and private sector infrastructure projects, as well as meeting demand from the defence industry and gas-cylinder manufacturers.

It is one of six firms earmarked for privatisation through an initial public offering either this year or next. The sale would help raise funds to plug a budget deficit and improve the firm’s performance.

http://www.forbes.com/feeds/afx/2009/05/05/afx6377242.html

 

Category: Indonesia