TOKYO, Aug 11 (Reuters) - Japan’s Nippon Steel & Sumitomo Metal Corp said on Monday it and Indonesia’s largest steelmaker PT Krakatau Steel have signed a definitive agreement to produce automotive flat steel in Indonesia through a joint venture.
The two companies will invest about $300 million to begin commercial operations of a state-of-the-art plant capable of producing 480,000 tonnes of high-end steel a year from around the middle of 2017, the Japanese firm said in a statement.
Nippon Steel - the world’s second biggest steelmaker by output - and Krakatau have been in talks since December 2012 about building a steelmaking plant in Indonesia.
Japanese steelmakers, fresh from a bumper year of profits amid an upswing in their home market after massive government stimulus, are looking to step up expansion overseas despite the prolonged supply overhang that now grips Asia.
The fresh drive overseas means top Japanese steelmakers will be producing more than half of the total output of their mainstay automotive steel sheets in factories outside Japan by 2016, as their home market stagnates with a falling population.
Reporting by Osamu Tsukimori; Editing by Tom Hogue