KRAS's Subsidiary, Meratus Jaya Iron & Steel, Will Soon Be Dissolved, Krakatau Steel's Managing Director Silmy Karim Reveals The Reason

Illustration. (Photo: Doc. Antara)

JAKARTA - President Director of PT Krakatau Steel Tbk, Silmy Karim said that his party will immediately liquidate or dissolve PT Meratus Jaya Iron & Steel (MJIS). This step is because the company is considered no longer efficient to continue.

The dissolution of one of the listed subsidiaries with the stock code KRAS has received the blessing of the Minister of State-Owned Enterprises (BUMN) Erick Thohir.

Silmy explained that before the liquidation was carried out, his party first looked for partners or business partners. Unfortunately, he did not explain further the link between the liquidation of MJIS and the management's efforts to find new business partners.

"Currently MJIS has received approval to be liquidated, but before this liquidation is executed, we are looking for partners," said Silmy in a Hearing Meeting (RDP) with Commission VI DPR RI, Monday, April 11.

For your information, MJIS is a joint venture between Krakatau Steel and PT Aneka Tambang Tbk (ANTM), Meratus Jaya Iron &. This company was founded on June 9, 2008. The company is engaged in the industry and steel products, trade and services related to steel.

MJIS is located in South Kalimantan by utilizing local iron ore reserves. In 2012, the company operated one unit of an iron factory (rotary kiln) from the planned two units, with a total capacity of 315,000 tons of direct reduced iron (DRI) per year.

The rotary kiln unit produces sponge iron which is processed from local iron ore. Meanwhile, the power plant has produced electricity using gas fuel from the rotary kiln factory unit. When it reaches full capacity, the electricity produced is 18 MW. In collaboration with PLN, this excess electricity will be distributed to the surrounding communities and small industries.

However, MJIS experienced problems in its operation, in the form of limited infrastructure and delays in delivery of goods, installation and assembling of equipment. Because there was a commitment from the contractor PT Krakatau Engineering and shareholders, ANTM and KRAS were finally able to overcome these obstacles.

"But this can't be used because it's already inefficient and the location is far from further production," he said.

Quoted from the Meratus Jaya website, this company has been operating since 2008 and has stopped operating due to falling iron ore prices on the world market. Thus, the selling price is not competitive.

This company has also been in production for approximately 3 years and has made the first shipment of sponge iron products of 5,000 metric tons to Krakatau Steel.

"Krakatau Steel itself, we no longer use sponge iron," he said.