Hanwa, a Japanese metal trader has acquired 10pc shares in PT Dexin Steel Indonesia. Dexin is one of the major blast furnace mills in Indonesia, located at Morowari Province, Sulawesi. Through the venture, Hanwa looks to expand its supplying capacity, especially in Southeast Aisa.
The step aims at diversifying investment and is a part of a strategy to hold shares in a leading billet maker, a source at Hanwa informed Davis Index. Hanwa aims to handle over 1mn mt of finish steel products, semi-finished steel, ferroalloys and steelmaking raw materials in 2020.
Dexin Steel is a joint venture formed between Delong Steel Group, China; Shanghai Decent Investment Group of Tsingshan Holdings Group, China and Indonesia Morowali Industrial Park.
Production commences at first blast furnace
Dexin Steel has an estimated annual production capacity of 350,000mt of slabs, billets, round bars and wires. Operations at its first blast furnace commenced on March 29, 2020, and production at its second blast furnace is scheduled to begin in May 2020.
Dexin Steel, Indonesia supplies billets to Southeast Asian and Chinese buyers. After the outbreak of COVID-19, Chinese mills have resumed billet imports from the Indonesian mills, which are offering billets at competitive prices. In a month, Dexin Steel mill is heard to have supplied over 100,000mt of billets to China on rising demand.
Other projects in Indonesia
Hanwa is also involved in a few other joint ventures in the same industrial park, which enables the company to have an advantage of utilizing common infrastructures.
The company is in a joint venture with Chinese company Tsingshan which has an annual 3mn mt nickel pig iron and hot rolled stainless steel producing capacity. The project has further planned to expand annual production capacity up to 5mn mt. Yet another project is planned which will produce high purity nickel-cobalt compounds of rechargeable batteries.
In its medium-term business plan, Hanwa is promoting strategy to “create a second Hanwa in Southeast Asia”. These joint ventures are a part of this strategy.