Japan-based steelmaker Osaka Steel has announced its decision to withdraw from steel operations in Indonesia, confirming the suspension of business at its consolidated subsidiary PT Krakatau Osaka Steel (KOS), a joint venture with Indonesia’s state-owned producer PT Krakatau Steel (Persero) Tbk.
KOS, which began commercial production in 2017, supplies small- and medium-sized steel sections and rebar mainly to the Indonesian domestic market. Although the company achieved profitability in 2021, Osaka Steel said the subsidiary has posted consecutive losses since 2022.
Demand slowdown and mounting losses
According to Osaka Steel, sharp cuts to Indonesian government infrastructure spending in early 2025 led to a sudden contraction in domestic steel demand. This resulted in lower sales volumes and intensified competition, further squeezing margins amid a persistent supply-demand imbalance in the Indonesian market.
After reviewing restructuring options and potential asset sales, Osaka Steel concluded that maintaining stable earnings would be difficult under current market conditions.
Operations to stop in 2026
With no sale agreement materializing, the company decided to fully exit the Indonesian steel business. Osaka Steel stated that production at KOS will cease on April 30, 2026, followed by a halt in shipments on June 30, 2026.
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