Strategic Synergy & Industrial Infusion

PT Krakatau Steel, through its subsidiary PT Krakatau Sarana Infrastruktur, has earmarked more than 500 hectares of land in the Krakatau Industrial Estate in Cilegon, Banten. This significant land allocation is meant to facilitate a massive investment from China’s Delong Steel Group, alongside its Indonesian venture arm, PT Dexin Steel Indonesia. This collaboration marks a crucial leap in bilateral industrial engagement between Indonesia & China.

Visionary Venture & Metallurgical Momentum

The partnership will culminate in the establishment of an integrated steel plant boasting an annual capacity of 3 million metric tons. The pact materialised in May 2025 when Krakatau Steel officials visited Delong Steel Group’s headquarters in China to formalise a cooperation agreement. According to PT Krakatau Steel President Director Akbar Djohan, the deal signifies more than infrastructural development, it represents a technological, commercial, & ecological evolution.

Foundational Footprint & Geopolitical Gravitas

Delong Steel Group, ranked 11th globally & 7th in China, views Cilegon as an ideal nucleus for its regional operations. The Krakatau Industrial Estate provides well-developed infrastructure, strategic proximity to trade routes, & ready access to skilled labour. These conditions make it a compelling choice for the group’s first large-scale footprint in Southeast Asia, with ambitions reaching far beyond steel production.

Eco-Efficiency & Green Growth Goals

What makes this venture noteworthy is its emphasis on green steel. The plant is envisioned to produce environmentally sustainable steel products using cutting-edge technology aimed at minimising CO₂ emissions. This aligns with Indonesia’s national objectives to promote low-carbon industries & support the global shift toward eco-conscious manufacturing.

Technological Transfer & Expertise Exchange

The joint venture promises not only physical construction but also the infusion of advanced metallurgical technologies, digital automation systems, & AI-driven production analytics. This knowledge transfer will uplift domestic capabilities & help Indonesia’s steel industry climb the value chain. President Director Akbar Djohan highlighted that the collaboration will enrich both human capital & infrastructure assets in Indonesia.

Resilient Revival & Economic Empowerment

The plant is projected to catalyse economic rejuvenation in Cilegon & neighbouring areas by generating thousands of jobs across construction, logistics, operations, & ancillary services. It is also expected to boost Indonesia’s industrial output, raise export potential, and contribute to a more favourable trade balance, especially through reduced steel imports & increased domestic value addition.

Diplomatic Dynamics & Multinational Matrix

PT Dexin Steel Indonesia, the joint venture’s operational arm in Indonesia, includes key stakeholders such as Shanghai Decent Investment, Hanwha Singapore, & PT IMIP. Their partnership reflects a sophisticated multinational cooperation matrix. The collaboration blends Chinese capital, Singaporean strategic backing, & Indonesian operational depth, creating a resilient structure for long-term industrial success.

Ecosystem Evolution & National Necessities

Ultimately, the collaboration is aligned with Indonesia’s broader economic framework, especially its National Strategic Projects. Akbar Djohan underscored that the initiative aims to build not just a steel factory, but a full-fledged, globally competitive steel ecosystem. The Cilegon hub is anticipated to become a cornerstone of Southeast Asia’s metallurgical excellence, establishing new standards for productivity & environmental responsibility.

Key Takeaways

• PT Krakatau Steel has allocated over 500 hectares in Cilegon for Delong’s $ investment.

• The integrated plant will produce 3 million metric tons of steel annually, starting post-2025.

• The project will focus on green steel production & create thousands of local jobs.