JAKARTA - The heavy pressure on the national steel industry has once again claimed victims. Krakatau Osaka Steel is confirmed to stop operations in April 2026, following the increasingly tight competition with cheap imported steel products, especially from China.
President Director of PT Krakatau Steel (Persero) Tbk Akbar Djohan revealed that the decision to close was taken amid the weakening of the competitiveness of domestic production of long product steel.
Krakatau Osaka Steel is a joint venture between Krakatau Steel and Osaka Steel from Japan.
"One joint venture from Krakatau Steel will close operations in April. Its name is Krakatau Osaka Steel," said Akbar in a public hearing (RDP) with Commission VI of the Indonesian House of Representatives in Jakarta, Wednesday, February 4.
Akbar said, Krakatau Osaka Steel produces long products such as threaded iron, plain iron, elbows, and channels. However, these products are now increasingly squeezed by the flood of cheap imported steel.
"This can no longer compete with the proliferation of cheap long steel product imports from China," he said.
Ironically, continued Akbar, the pressure on the domestic steel industry actually occurred in the midst of the government's plan to carry out various national strategic projects, ranging from the three million house building program, Free Nutritious Meals (MBG), to the Red and White Cooperative, which all require large and sustainable steel supplies.
In addition to Krakatau Osaka Steel, Akbar also mentioned the closure of the long product steel plant owned by Ispat Indo in Surabaya, East Java, which occurred around October 2025. The company is under the auspices of the Mittal Steel Group, one of the world's largest steel producers.
For information, based on a report by Nikkei Asia, Osaka Steel is rumored to be withdrawing from its joint venture business in Indonesia following a sharp drop in steel demand, which was triggered by a significant cut in government infrastructure spending.
The Japanese company said various efforts to create stable profits had not borne fruit, including efforts to find buyers to divest the business.
The withdrawal process and technical details of the closure will be discussed further with Krakatau Steel as a joint venture partner.
The production of Krakatau Osaka Steel is scheduled to end on April 30, 2026, while deliveries and sales will be stopped on June 30, 2026. Osaka Steel stated that the value of losses due to this withdrawal is still in the calculation stage.
In the fiscal year ended December 2024, Krakatau Osaka Steel recorded sales of 25.3 billion yen or around 161 million US dollars, with a net loss of 1.3 billion yen.
Although it had made a profit in 2021, the joint venture company which was established in 2012 again recorded a loss since 2022.
The closure adds to a list of serious challenges for the national steel industry.
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