Seven local and foreign steel companies immediately invested US $ billions of funds to build a new steel plant.
The seven companies entered the upstream to downstream steel industry, are as follows:
- Shandong, the Chinese company intends to build a stainless steel / SS steel factory in Konawe, Southeast Sulawesi, with a capacity of 1 million tons per year. Investment value reaches US $ 2 billion.
- Tsingshan Group, established a company called PT Tsingshan Steel Indonesia (TSI) to build nickel pig iron (NPI) and pig iron plants with a capacity of 507 thousand tons and 700 thousand tons in Morowali industrial area (KI), Central Sulawesi. Investment value reaches US $ 118 million.
- Dexin through PT Dexin Steel builds a carbon steel plant with a capacity of 3 million tons per year in Morowali. Investment will be US$ 750 million.
- Sunrise Surabaya builds a galvanizing coated sheet factory with a capacity of 140 thousand tons per year
- Gunung Garuda Bekasi built a blast furnace (BF) iron plant with a capacity of 1 million tons and cold rolling mill (CRM) 200 thousand tons per year.
- Delco Prima builds a concrete reinforcement steel factory (rebar) with a capacity of 300 thousand tons peryear
- Tjakrindo, established a CRM factory with a capacity of 250 thousand tons per year.
OTHER STEEL PLANTS
Tata Steel, one of the world’s largest steel producers from India, expressed its desire to invest in building a steel wire steel mill in Indonesia.The investment value is estimated to reach SGD 60 million or equivalent to Rp 633 billion. Currently the Tata Steel is conducting a survey in several locations of industrial areas on the island of Java, including in Banten and East Java.
Then there is also the Chinese company Hebei Bishi Steel Group which wants to build a steel plant in Kendal Regency, Central Java. This investment value of US $ 2.5 billion is the largest in Asia. Its seriousness is shown by cooperating with its partner in Indonesia, PT Seafer Industrial Estate, which has provided 700 hectares of land in Patebon Subdistrict.
For the first phase, they will build a 3 million tons steel plant, a coking coal plant with a capacity of 2.4 million tons, a 270 MW power plant and a dock support facility with a capacity of 100 DWT will be built.The plant is the biggest plan in Asia and it can absorb up to 10,000 workers.
MOROWALI IS THE NEW STEEL INDUSTRIAL AREA
Indonesia is now one of the world’s major stainless steel producers, besides China. Before we only knew about the Krakatau Steel industrial area in Cilegon (Banten) as the center of Indonesia steel producers.
Now there is a new production center in Morowali (Sulawesi) where it is close to the location of its nickel mine.
In Morowali District, 4 stainless steel plants have been integrated with raw materials, namely Nickel Pig Iron.
The total capacity of the four plants will reach 5.7 million tons of coarse stainless steel (slab) and finished products in the form of hot rolled (HR) stainless and cold rolled (CR) stainless.
The majority of the project was driven by the Chinese steel king Tsingshan Group who acted as the main investor in the Morowali Industrial Area.
In fact, this Morowali Industrial Estate was developed and built by Tsingshan. Based on government data, Tsingshan also collaborated with Bintang Delapan Group to form PT Sulawesi Mining Investment (SMI), which has a 300,000 tons per year Nickel Pig Iron and 1 million tons of stainless steel slab per year. The investment value reaches US $ 635 million and US $ 180 million, respectively. Tsingshan didn’t stop there.
They then hooked Ruipu Technology Group and IMIP to establish PT Indonesia Tsingshan Stainless Steel. The company has a Nickel Pig iron plant of 600 thousand tons per year and a stainless steel slab of 1 million tons per year, which has a total investment of US $ 818 million.
Furthermore, Tsingshan together with PT Bintang Delapan Mineral formed PT Tsingshan Steel Indonesia (TSI) which built a carbon steel plant with a capacity of 1 million tons and Nickel Pig Iron 500 thousand tons per year.
Still with Ruipu again, Tsingshan formed PT Indonesia Ruipu Nickel and Chrome, which has a ferochrome plant with a capacity of 600 thousand tons per year and staineless steel cold rods of 700 thousand tons. The investment value is US $ 461 million.
Other projects were worked on by PT Guang Ching Nickel & Stainless Steel. The company has 600,000 tons of Nickel Pig Iron factory per year, 1 million tons of stainless steel slab, and 2 million tons of hot steel rods per year.
STAINLESS STEEL EXPORTS ARE TARGETED TO REACH US$ 6 BILLION
Exports of stainless steel (SS) from the industrial area (Kl) of Morowali or Indonesia Morowali Industrial Park (IMIP) are targeted to reach US $ 6 billion. With the presence of the industry in Morowali, Central Sulawesi, Indonesia has become one of the leading SS players in the world, with an estimated production of 3 million tons this year.
In the area managed by PT IMIP, there are three raw SS producing companies (slabs), namely PT Sulawesi Mining Investment (SMI) with a capacity of 1 million tons per year, PT Indonesia Guang Ching Nickel and Stainless Steel Industry (GCNS) 1 million tons per year, and PT Indonesia Tsingshan Stainless Steel (TTSS) 1 million tons per year. SS Slab is processed into SS.
Investment in IMIP is expected to increase to US $ 5 billion. That means, IMIP is able to bring in large investments in remote locations, so Morowali is now an advanced, modern and smart city.
After the period of engineering, procurement and construction (EPC) was completed, in 2020, it is estimated that the number of employees there will reach 30-32 thousand people, with an association of 85-100 thousand employees.
SS IMIP’s production capacity surpasses Japan, which is only 2.8 million tons in 2016 and is on par with India this year. So, how does the government use SS and carbon steel from this region.
Besides SS, several companies at IMIP will build carbon steel factories. For example, PT Dexin Steel Indonesia will build a carbon steel plant with a capacity of 3.5 million tons per year assisted by 10 supporting companies. Then, IMIP will build a pure nickel plant with a capacity of 30 thousand tons per year and nickel raw iron with a capacity of 150 thousand tons per year.
The land area of IMIP, which was initially 2,000 hectares (ha), will be developed to 3,000 ha IMIP in collaboration with the Bintang Kedelapan Group from Indonesia and the largest SS company in the world, the Tsingshan Steel Group, from China.
IMIP Infrastructure consists of a 1,100 megawatt (MW) steam power plant (PLTU) and is being built by a 700 MW power plant, so its capacity will increase to 1,830 MW. IMIP also has a port with two piers with a capacity of 100,000 deadweight tonnage (DWT) and around 25 piers with a capacity of 3,000-30,000 DWT. Unloading capability reaches a capacity of 40 million tons
MOROWALI AIRPORT WILL OPERATE
PT Indonesia Morowali Industrial Park (IMIP) plans to build an airport in the Morowali Industrial Area. Airport construction to facilitate access for investors.
Construction of the airport runway has been completed, including the licensing document. IMIP management predicts that the airport will operate in two to three months or around February-March 2019. The investment value of airport development reaches tens of billions of rupiah.
On the other hand, the Morowali Industrial Zone is expected to obtain investment in the carbon steel sector. So far, the industries that occupy the area produce more nickel and stainless steel. Until 2020, the investment value of carbon steel factories in the Morowali Industrial Estate reached US $ 6 billion.
The plant was built by steel producer PT Dexin Steel Indonesia, which has been worked on since the beginning of 2018. The target is for the construction of the plant to be completed by the end of 2019 and to operate in 2020.
Indeed, industrial estates in Bahodopi Subdistrict, Morowali Regency, Central Sulawesi Province, were used as centers for integrated ferronickel, stainless steel and downstream products.