“We have looked at the feasibility of establishing a project in Indonesia and at the moment are not pursuing it,” Chief Executive Officer Lakshmi Mittal said on a telephone conference call on April 29. “The economy in Indonesia has not been growing, and there is not fast economic growth in this part of the world.”
Steelmakers have scaled back investment plans and cut production and payrolls after the world economic slump eroded demand for the metal. Luxembourg-based ArcelorMittal, which last week posted its second consecutive quarterly loss, said in April it might reduce the size of a planned Indian plant by half and indefinitely defer a second facility.
ArcelorMittal walked away from an accord to buy a 40 percent stake in Indonesian steelmaker PT Krakatau Steel because of opposition from the Asian company’s managers and the country’s parliament, the Wall Street Journal reported today. It cited comments from Maxi Gunawan, co-chairman of the Indonesian British Business Council.
The European steelmaker said in May 2008 it planned to invest $10 billion in Indonesia, including taking a Krakatau stake. Giles Read, a London-based spokesman for ArcelorMittal, said today the company had no further comment on plans for
Indonesia beyond the CEO’s remarks on last week’s call.
The Indonesian economy, Southeast Asia’s largest, probably expanded by 4.6 percent in the first quarter, the least in more than four years, Bank Indonesia said last month.
For Related News and Information:
Steel company earnings stories: TCNI STL ERN
Top metals stories: METT
ArcelorMittal revenue breakdown: MT NA
--Editors: Dan Weeks, Tony Barrett.
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