Steel, being one of the main materials used in development in the sectors of industry, construction, and other sectors, will keep rising in demands along with the growth in these sectors. Hence, we can estimate how high the demand of steel will be along with the continuous growth in, the various sectors of development. Another factor as regards the local demand for steel is the national consumption of steel per capita which is still low, about 20 kg; compared with Malaysia 50 kg; and Taiwan over 200 kg, makes a good chance for a raising demands for steel on the domestic market.



PT. Krakatau Steel (PT. KS) as one of the steel mills and the only integrated steel mill in Indonesia, with the experience, resources and technology is has acquired, should be able to perceive and capture the best of the opportunities that arise. One product of PT. Krakatau Steel, namely is Hot Rolled Coil /Plate (HRC/P), it is a main product, which is extensively used in construction works and as a raw material of the downstream industry of Cold Rolling Mill (CRM) which produces Cold Rolled Coil /Sheet (CRC/S).



Now, with the high demands of steel by the domestic market and the growing demands for HRC/P, while the present capacity of PT. Krakatau Steel (HSM --> HRC/P = 2 million tons p.a.), it is still unable supply the present demands, it is found necessary to take proper step in anticipation of the low supply of the locally-produced steel, and to adopt the right strategy in face of the global economic conditions and global market.



This will require a comprehensive study of the HRC/P market which will identify the real demands for this product by market segment and by grade/spec and dimensions. Having identified these, PT. KS will be able to determine which market target to pursue with the present capacity of the mill, and to decide on plant extension by PT. KS itself or in joint venture development, to anticipate the impact thereof on the product mix and market target of PT. KS, and to decide among the alternatives of production process routes to be applied.



This paper will not deal further in technology, infrastructures, financial aspects, and will instead restrict the discussion to the market studies, and the production process alternative routes to be determined by maximization of the available facilities of the plant.



Research Location: PT Krarkatau Steel

Supervisor:

Accepted on: May 1996