AGREEMENT has been reached for an Indonesian steel firm to buy the
defunct Ravenscraig plant which will be dismantled and shipped to the
Far East
at a total cost of around
#525m.
Directors of the privately-run PT Gunawan Dianjaya company said it
would buy the 2,200,000-tonne capacity plant, closed by British Steel
last year, and reassemble it in North-east Malaysia.
A formal announcement was expected in the near future though a British
Steel spokesman in London yesterday denied that any deal had yet been
agreed. ''There is no other party involved in the talks but there are
still some points to be sorted out,'' he said.
BS also said the value of the transaction released by the Indonesians
included the considerable shipping and integration expenses, with the
actual price paid for the Ravenscraig plant a fraction of the total.
H. Rimbo, a Gunawan director said from the company's headquarters in
the eastern city of Surabaya: ''Given its capacity, it will be the
largest steel mill in South-east Asia.''
The plant, to be sited in the energy-rich state of Terengganu, will
also be South-east Asia's first blast-furnace steel mill and Malaysia's
first steel slab plant.
Rimbo said Gunawan, which has had experience in similar reassembly
operations, had been scouting for a disused steelworks for some time.
''It would be much more expensive to start a brand-new plant.''
Almost all the equipment and plant at Ravenscraig, weighing millions
of tonnes, will be shipped to Kemaman, the region's main deep-water port
with plentiful gas and water supplies.
Gunawan has appointed British Steel as consultant for the relocation
and work on the plant will start in Septem-
ber.
The resited mill is due to come onstream by mid-1995.
The Malaysian plant will use the blast furnace/basic oxygen method to
make steel slabs which will be processed further into steel plates and
hot-rolled coils. It will import six million tonnes of iron ore and coal
a year, mainly from Austra-
lia.
Gunawan will also build a hot strip mill, with a capacity of 1,200,000
tonnes a year, at the plant to make hot-rolled coils, mainly for
domestic consumption.
The remaining one million tonnes of its annual slab output will be
exported to industries in the Far East.
Some of the steel, which can be produced cheaply using local labour,
could eventually make its way back to Britain, though industry
specialists said high transport costs generally deter such bulk trade.
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