PT Krakatau Steel (Persero) Tbk succeeded in producing the first Hot Rolled Coil (HRC) from the Hot Strip Mill 2 (HSM 2) factory with a capacity of 1.5 million tons per year.

With an investment of US$521 million or equivalent to Rp7.5 trillion, the factory began construction in 2016. This factory produces HRC steel products with certain specifications to complement the Krakatau Steel 1 HSM factory products, operating since 1983.

One type of product that is the specialty of this new factory is HRC for automotive needs, and this factory is the first factory in Indonesia that can produce HRC thicknesses ranging from 1.4 mm to 16 mm with widths ranging from 600 to 1,650 mm.

"This factory is a factory with the latest technology and systems that have a higher level of efficiency. The total operational cost savings can reach 25% compared to HSM plants in general due to reduced energy consumption and more optimal use of labor," said Krakatau Steel President Director Silmy Karim through a press release, Tuesday (18/5).

According to him, through this HSM 2 factory, Krakatau Steel's HRC production capacity increased to 3.9 million tons per year to reduce HRC imports that reached 0.9 - 1.9 million tons per year while the national demand for HRC / Plate steel reached 4.8 - 5.3 million tons per year.

The company has prepared the new factory to anticipate an increase in production capacity of up to 4 million tons per year so that in future development, the required investment is lower than that of competitor factories at home and abroad.

"This factory is a factory with the latest technology and systems that have a higher level of efficiency. The total operational cost savings can reach 25% compared to HSM factories in general due to reduced energy consumption and more optimal use of labor," he continued.

The completion of the construction of this factory was delayed from initially planned in early 2020 due to the Covid-19 pandemic. The obstacle at that time was at the commissioning stage due to the difficulty in bringing in technicians from abroad.

A consortium with Germany's SMS Group and PT Krakatau Engineering built the HSM 2 plant.

SOEs Minister Erick Thohir appreciated the successful operation of the HSM 2 factory.

"With the operation of the HSM 2 Krakatau Steel Factory, it is able to meet domestic demand for steel so that it will realize the independence of the national steel industry. This will contribute to saving the country's foreign exchange reserves of up to Rp29 trillion, "said Erick.