Nippon Steel Trading, Japanese major steel dealer and a subsidiary of Nippon Steel, announced on Friday the firm establishes a coil center (CC) for automotive parts in Indonesia in cooperation with Krakatau Steel, Indonesian largest steel maker, Adyawinsa Dinamika, Indonesian automotive part maker, and Dwijaya Sentosa Abadi, Indonesian coil center. CC will start operation in January 2013. Capex totals US$ 37.5-38.0 million (approximately 2.9 billion yen). Nippon Steel Trading provides steel processing and delivery service for local or Japanese automotive part makers in Indonesia where four-wheel vehicle production is expected to increase largely. This is the first CC in Indonesia and the eighth offshore CC worldwide for Nippon Steel Trading. In Indonesia, other Japanese major steel traders have recently activated CC establishment.
CC is named Indo-Japan Steel Center (IJSC) and located in Karawang City, about 55 kilometers south from Jakarta. Capital fund is 100 billion rupiahs (approximately 900 million yen), each 30% controlled by Nippon Steel Trading, Adyawinsa and Dwijaya and rest 10% by Krakatau. IJSC will install one slitter and one leveler with processing capacity at 10,000 tonnes per month. Nippon Steel Trading sends the president. IJSC aims annual revenue at approximately 4 billion yen in 2013 with 70 employees. Nippon Steel Trading has established a local company in Jakarta in 2006 and increased steel export to Indonesia to 100,000 tonnes per year from previous 40,000 tonnes per year. Nippon Steel Trading plans to cultivate local customers through CC, starting product supply mainly to Adyawinsa. IJSC purchases cold, pickled and surface treated steel coils mainly from Japan while procures coils from Krakatau Steel along the users’ orders. Japanese four-wheel vehicle makers are increasing investment in Indonesia and building up local factories. Four-wheel vehicle sales in Indonesia are expected to reach 900,000 cars in 2011.
