Japanese steel producer Osaka Steel has announced the suspension of operations of its consolidated subsidiary PT Krakatau Osaka Steel (KOS), a joint venture with Indonesia's state-owned steel producer PT Krakatau Steel (Persero) Tbk, noting its decision to exit steel production in Indonesia.
KOS started commercial production in 2017 and since then has been supplying small and medium-sized steel profiles and fittings mainly to the Indonesian domestic market. While the subsidiary achieved profitability in 2021, Osaka Steel said that KOS has been continuously recording losses since 2022.
Overview of financial indicators and market conditions
According to Osaka Steel, a significant reduction in infrastructure spending by the Indonesian government in early 2025 led to a sudden reduction in demand for steel. This led to a sharp decline in KOS sales and increased competition, putting additional pressure on margins. Given the prevailing supply and demand imbalance in the Indonesian steel market, Osaka Steel concluded that maintaining stable profits by continuing KOS operations would be difficult.
The decision to withdraw from Indonesia
Osaka Steel noted that the sale of the Indonesian business, which was considered along with the operational restructuring, did not materialize. As a result, the company decided to completely exit its Indonesian steel business and suspend KOS operations. The company added that the production
