Indonesian steelmaker PT Krakatau Steel’s efforts to restructure USD 1.5 bln in loans are highlighting the industry’s challenges, according to Bloomberg.
The state-owned company is grappling with intense competition from cheap Chinese imports and has reported a net loss of USD 60 mln in the first half of 2024, up from USD 37.4 mln in the same period last year. Revenue fell sharply to USD 445 mln from USD 985 mln, partly due to a fire at its Banten province plant in 2023, which affected HRC production.
Krakatau Steel revealed in November that it was in talks to restructure its loans, citing the plant fire as a key reason. This is not the company’s first attempt at debt restructuring; in early 2020, it reached a deal with 10 lenders.
To support Krakatau Steel’s competitiveness, the government has proposed measures such as reducing imports and providing approximately USD 194 mln in direct aid. Despite these efforts, the company returned to losses in 2023 after three consecutive years of profitability.
Founded in 1970, Krakatau Steel traces its origins back to 1960 when the Indonesian government signed an agreement with Russia’s Tyazhpromeksport to build Cilegon Steel Mills. Over the years, the company has expanded its product range to include HR and CR steel, as well as wire rod, achieving a production capacity of 4 mln tons per year by 2022.
