Krakatau Steel Ready to Send 120,000 Tons of Steel to Vietnam

PT Krakatau Steel (Persero) Tbk signed a memorandum of understanding (MoU) with Vietnam Steel Corporation in a series of events for the Iron Steel Summit & Exhibition Indonesia (ISSEI) 2025. This collaboration has resulted in a concrete commitment, namely the delivery of 120,000 tons of Hot Rolled Coil (HRC) over the next year.

"Krakatau Steel supplies up to 120,000 tons of HRC steel to Vietnam Steel Corporation and this indicates that we are starting to optimize the production of the Hot Strip Mill 1 Plant after recovery," explained Krakatau Steel President Director, Muhamad Akbar Djohan after the signing at the Jakarta International Convention Center in a written statement, quoted Sunday (25/5/2025).

This step marks Krakatau Steel's expansion after the recovery of the main plant, while also demonstrating the company's readiness to return to being an active player in the ASEAN regional supply chain.

Krakatau Steel's move is in line with the direction of the Coordinating Minister for Economic Affairs, Airlangga Hartarto, who opened ISSEI 2025. In a press conference with Krakatau Steel management, Airlangga emphasized the importance of synergy between ASEAN countries to maintain the competitiveness of the steel industry amidst global pressures, including international tariffs and changes in the logistics landscape.

"It is time for ASEAN, as one of the largest steel producers in the world, to work together," said Airlangga at the Krakatau Steel booth.

Airlangga also highlighted the growth of the processing industry sector which is still the backbone of Indonesia's GDP with a contribution of 19.25% in the first quarter of 2025. He added that iron and steel exports have grown by an average of 22.18% in the last five years, while domestic consumption has increased from 18.3 million tons in 2024 to a projected 47 million tons in 2035.

The signing with Vietnam Steel is a strategic step for Krakatau Steel to strengthen its position as a steel hub in the ASEAN region. After establishing partnerships with a number of partners from the Middle East and Europe, Krakatau Steel is now focusing on strengthening regional blocks - starting with Vietnam.

This collaboration also supports the national downstream strategy. Krakatau Steel does not want to just export crude steel, but wants to expand market penetration for value-added products such as:

• Automotive steel for the electric vehicle ecosystem,
• Defense steel to support domestic production with PT Pindad and PT PAL,
• Green-certified construction steel that is more efficient and environmentally friendly.

Local Content and TKDN Commitment

This MoU is also in line with the commitment to increase the Domestic Component Level (TKDN). As a domestic producer, Krakatau Steel not only wants to supply Vietnam's needs, but also explores the potential for exchanging steel materials and components that can strengthen Indonesia's production base. This synergy also opens up opportunities for harmonization of product specifications among ASEAN countries.

"We want to show that Krakatau Steel's transformation is real - in terms of efficiency, technology, and regional competitiveness," said Akbar Djohan.

The signing is part of a broader commitment affirmed in the ASEAN Iron & Steel Council, which was officially formed through the MoU of six ASEAN countries at ISSEI 2025: Indonesia, Malaysia, Vietnam, Thailand, Singapore, and the Philippines. The goal: to create regional integration, strengthen supply chain resilience, and build industrial alliances amid global uncertainty.

ISSEI 2025, held on May 21-23 by IISIA in collaboration with SEAISI, is a strategic platform for meetings of steel industry players from upstream to downstream sectors, regulators, users, and investors. This year, ISSEI carries the theme "National Steel, Regional Competitiveness" - a theme that Krakatau Steel is now realizing through concrete steps.

From the Hot Strip Mill in Cilegon to the negotiating table in Hanoi, Krakatau Steel shows that regional expansion is not just an ambition, but part of a grand strategy to build ASEAN steel leadership.

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