KRAKATAU STEEL EXPECTS RP19 TRILLION IN SALES IN 2010

Jakarta, Feb 8 (ANTARA) - PT Krakatau Steel expects its sales in 2010 to reach around Rp19 trillion or 18.7 percent higher compared to last year when the figure was Rp16.28 trillion, its marketing director said.

"The value of our sales this year is set to grow close to 20 percent," Irvan K Hakim, the marketing director, said at a hearing with House Commission VI here on Monday.

Irvan said the company had raised the target because steel price projections until the end of 2010 tend to improve.

He said in 2010 the price of steel sheet in the domestic market is expected to rise by around 20 percent from around Rp7,300 per kilogram right now although the sales volume of finish products was down from 2.2 million tons to only 2.1 million tons.

The company's net profit in 2010 meanwhile is predicted to reach Rp500 billion a little higher than last year's which was recorded at Rp490.85 billion.

The crisis started affecting the steel industry in 2008 and continued until the first semester of 2009, marked by the collapsign of several steel companies in the world.

The sales growth in 2010 was driven by three things namely the blast furnace technology that makes electricity energy consumption to drop and the increasing use of coal-based technology (hot steel mills) and the establishment of subsidiaries.

Krakatau Steel and Pohang Steel Corporation (Posco) are cooperating to build an integrated steel plant with a production capacity of six million tons a year.

Irvan said the rate of utilization at Krakatau Steel in 2010 is expected to reach 85 percent, rising from 50 percent recored during the global crisis in 2008 and from the second semester of 2009 which was recorded at 70 percent.

He said the growth projection was also affected by the national steel consumptions estimates that kept rising from 2003 at around 13.5 percent a year except in 2009 when they dropped around 10 percent due to the crisis.

In line with the rising GDP by 5.0 to 8.0 percent in 2010 to 2014 the national demand is predicted to rise significantly, he said.

According to records, the rate of per capita steel consumption in the country reaches 31 kilograms, the lowest among the Asian countries, he said.

The rate of per capita steel growth and consumption is still low and therefore it still has the potential to grow in the future in line with the national economic growth, he said.***2***
R017