Gunung Steel

pending

 IFC is considering a $60 million A Loan to PT Gunung Rajapaksi Tbk (“GRP” or the “Company”), one of the largest private steel producer in Indonesia, located in Cikarang Barat, West Java Province, Indonesia. Until recently, GRP had a long and flat business line, geographically separated from each other by a public road and operating on separate land parcels.   GRP is currently in the process of selling the long business line.   The remaining flat business line occupies 141 ha and is situated within an area of mixed use with other industrial activities and residential areas in direct proximity.GRP operates one electric arc furnace (EAF) producing steel from scrap metal, hot briquetted iron, and pig iron with a capacity of 1.2 million tons per annum (tpa).  While the mix varies, inputs to the furnace are primarily scrap metal.  All scrap is obtained on the spot market with over 80% being sourced locally and the remainder being imported. Crude steel generated by the EAF is either used directly in the production process or to manufacture slabs, which are then reheated in furnaces, of which there are 2, and then used in production.  The portfolio of products includes hot and cold plates and hot and cold rolled coils with a production capacity of some 1.9 million tons per annum.  The investment will be used to fund the capital expenditure and working capital needs of the flat business line, including i) establishment of a new steel coating line, ii) measures to improve the efficiency and productivity of existing equipment, and iii) enhancing the raw material i.e., scrap, inventory.The company also has a blast furnace that has not been commissioned. It is currently assessing options for dismantling this facility as part of its broader efforts towards decarbonisation, which IFC’s Advisory Services may support.