NEW DELHI: India's state-run Steel Authority of India and Indonesia's Krakatau Steel plan to invest as much as $350 million in a stainless steel slab plant in Indonesia, two Indian sources familiar with the matter said this week.
The plant will have an annual capacity of 500,000 metric tons and is expected to be operational within the next three to four years, the sources said.
Earlier this month, SAIL and Krakatau Steel signed a preliminary agreement to form a joint venture to produce stainless steel slabs in Indonesia during Indian Prime Minister Narendra Modi's visit to the country.
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SAIL plans to send a technical team to Indonesia next month to prepare a feasibility report, after which the two companies will finalise the equity structure of the joint venture, the timeline for government approvals and other details, the sources said.
The sources declined to be identified because the deliberations are not public. SAIL did not respond to a Reuters email seeking comment sent on Monday. Krakatau Steel did not respond to a request for comment made on Tuesday.
The proposed plant's capacity could be expanded after it becomes operational, the sources said.
SAIL will consume the entire output of the planned Indonesian facility and bring the stainless steel slabs to its Salem plant for rolling and finishing, one of the sources said.
SAIL's Salem plant is in the southern Indian state of Tamil Nadu.
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The state-run steelmaker will primarily supply the finished products to Indian customers, while a small percentage could be exported to the Middle East and Europe, the sources said.
SAIL was India's third-largest steel producer in the fiscal year to March 2025, with a 10.1% share of the domestic market, according to commodities consultancy BigMint.
India, the world's largest crude steel producer after China, has identified Indonesia and more than a dozen other countries for cooperation in the steel sector to boost exports and secure key raw materials.
Finished steel consumption in India has risen 55% over the past five years, outpacing the 42% increase in production, BigMint data showed.
Indian steelmakers are pivoting to the domestic market to offset weaker exports as Europe and Britain tighten imports, but competition from Chinese steel is blunting that strategy.
