Krakatau to Upgrade Banten Port for Rp 735b
The port subsidiary of state-controlled steel maker Krakatau Steel plans to build a 600-meter-long dock at Cigading port in Banten, the head of the company said on Tuesday.
The Krakatau Bandar Samudera project is estimated to cost Rp 735 billion ($76.6 million). It is intended to serve ships carrying production output from a joint venture between Krakatau Steel and South Korea’s Posco.
Krakatau Steel chief executive Irvan Kamal Hakim said construction of Dermaga 6 dock is expected to be completed in December 2013, earlier than the previous target date of February 2014.
KBS expects the presence of Dermaga 6 dock to help it boost the handling capacity of its ports to 25 million metric tons per year by 2017, from currently 10 million tons.
“Dermaga 6 should be capable to serve vessels with 200,000 dead weight tons,” Irvan said at the Cigading port in Cilegon.
Irvan said KBS would not only build the dock, but also the road that connects Cigading port to the Krakatau-Posco industrial park.
KBS president director Zamhari Hamid said the Dermaga 6 dock will be equipped with a conveyor line with a capacity of 3,000 tons per hour as well as two gantry ship unloader cranes with a capacity of 1,500 tons per hour.
Krakatau-Posco, which is 70 percent owned by Posco and 30 percent by Krakatau Steel, is spending $6 billion to build integrated steel mills in Cilegon.
Construction is divided in several phases. The first is expected to be completed in 2013, with a planned steel production capacity of three million tons annually. The capacity is set to double in the second phase. The entire project is expected to create 173,000 jobs during the construction phase, and 63,000 once production begins.
Krakatau, Indonesia’s largest maker of steel, will have the option to increase its stake to 45 percent after the factory is completed.
In January, Fazwar Bujang, the previous president director of Krakatau Steel, said Krakatau-Posco planned to set up 23 new subsidiaries to provide a variety of products and services to the joint venture.
Krakatau’s net income fell in the first half of this year amid increasing production costs and foreign exchange losses.
In the first half, Krakatau Steel posted Rp 107 billion in net income, compared to Rp 1.1 trillion in the same period a year earlier.
Revenue, however, grew to Rp 11 trillion for the period, up 31 percent on a year earlier.
Shares in Krakatau Steel fell 4.1 percent to Rp 710 in Jakarta on Wednesday.
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