South Korean steel giant Posco announced in a statement that it is collaborating with the Industrial Bank of Korea to achieve joint growth with its Indonesian suppliers and support the country's steel industry in general.
Relevant Indonesian units - PT Krakatau Posco and PT Bank IBK Indonesia - signed a business partnership in Jakarta earlier this month with the participation of government and company officials.
PT Krakatau Posco is a joint venture between Posco and Indonesian state-run steelmaker PT Krakatau Steel. Completed in 2014 in the industrial city of Cilegon, the steel plant produces approximately 3 million tons of steel sheets per year. Operating profit exceeded $700 million last year.
According to the latest agreement, PT Krakatau Posco will fund PT Bank IBK Indonesia, and the bank will offer up to $10 million in loans and other financial benefits to partner firms.
This is the first overseas case for both Posco and IBK to seek joint growth with local suppliers.
The beneficiaries of the loan program will be recommended by the steelmaker. Companies that borrow in Indonesian rupees will enjoy up to a 4 percent reduction in the interest rate, while companies that borrow in US dollars will receive a 3 percent interest rate cut.
“We will continue our joint growth efforts not only with our suppliers, but also with all stakeholder groups in the Indonesian steel industry,” said Kim Kwang-moo, president of PT Krakatau Posco.
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