- Region: Asia
- Manufacturing and Services
- Overseas Investment Loans
November 27, 2015
The Japan Bank for International Cooperation (JBIC; Governor, CEO: Hiroshi Watanabe) signed on November 26 a loan agreement amounting up to USD11.5 million (JBIC portion) with PT Krakatau Osaka Steel (KOS), an Indonesian subsidiary of OSAKA STEEL CO., LTD. (OSAKA STEEL). The loan is cofinanced with Sumitomo Mitsui Banking Corporation (SMBC) (lead arranger) and Mizuho Bank, Ltd., with a total cofinancing amount of USD115 million.
This loan is intended to provide the necessary funds for the construction steel products manufacturing and sales business, including reinforced steel bars, small sections and flat bars (production capacity: 500 thousand tons/year) of KOS, in which OSAKA STEEL has an 80% stake and a state-owned Indonesian steel manufacturing company, PT KRAKATAU STEEL (Persero) Tbk (KRAKATAU), has a 20% stake.
With continued infrastructure enhancement in Indonesia, the construction steel market is expected to grow in the medium and long-term. Given such anticipation, OSAKA STEEL aims to expand its sales platform in Indonesia by producing construction steel products locally through its joint venture with KRAKATAU. This project will also establish OSAKA STEEL's first overseas manufacturing base. Through the support of such overseas business deployment of OSAKA STEEL, this financing will contribute to maintaining and strengthening the international competitiveness of Japanese industries.
As Japan's policy-based financial institution, JBIC will continue to support the overseas business deployment of Japanese companies by drawing on its various financial facilities and schemes for structuring projects and performing its risk-assuming function.