Two Indonesian companies have entered into a strategic partnership to establish SouthEast Asia’s first seamless pipe production plant at Krakatau Steel industry complex in Cilegon, Banten. The deal is worth around USD 325 million.
Sep 4, 2024
Two Indonesian companies, which include a leading seamless pipe manufacturer and a well-established steel pipe supplier, have entered into a strategic partnership to establish Southeast Asia’s first seamless pipe manufacturing facility on the picturesque islands of Java.
PT Inerco Global International has entered into a strategic partnership with PT Artas Energi Petrogas to establish Southeast Asia’s first seamless pipe manufacturing facility at Cilegon in Banten, the westernmost province of Java Island in Indonesia.
Mr. Hendrik Kawilarang Luntungan, CEO of PT Inerco Global International, signed the cooperation agreement worth around USD 325 million with Mr. Jose Antonio Reyes, CEO of PT Artas Energi Petrogas
As per the deal, the companies would set up a seamless pipe production plant within the Krakatau Steel industry complex in Banten.
Mr. Luntungan said the project aligned with President Joko Widodo’s vision of transforming Indonesia into an industrial nation by increasing oil production and promoting domestic value addition.
Noting that Indonesia was currently importing steel pipes worth around USD 96.9 million annually, he said the operation of the seamless pipe factory would help the country save on foreign exchange.
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The plant would be able to address the growing demand for seamless steel pipes in Indonesia’s oil and gas sector, which currently stood around 500,000 tons per annum, he added.
Mr. Luntungan said PT Artas Energi Petrogas had an annual production capacity of 250,000 tons. However, the factory’s domestic component level (TKDN) or local content was currently only 43–50 percent as it imports raw materials. The aim of PT Inerco Global International was to increase the TKDN value of PT Artas Energi Petrogas to 95 percent, he added.
