POSCO and Tsingshan invest in stainless steel plant construction in Indonesia

The joint venture envisages a production capacity of 2 million tons per year and strengthening positions in Southeast Asia

South Korean steel producer POSCO and Chinese company Tsingshan Holding Group have signed an agreement to build a new stainless steel plant in Morowali Industrial Park on the island of Sulawesi, Indonesia. This was reported by The Korea Economic Daily.

The new plant is expected to have an annual production capacity of 2 million tons, which is almost equal to South Korea’s total stainless steel production.

The project will be implemented as a joint venture. POSCO will acquire a 44.1% stake in PT Xinheng Metal Indonesia from Tsingshan’s affiliate PT Makmur International Investment PTE, while Tsingshan will retain a 55.88% stake. Both companies will jointly manage the construction and operation of the new plant.

Construction of the new factory is expected to begin as early as next year. POSCO’s investment exceeds 1 trillion Korean won ($708.3 million), demonstrating the company’s serious intention to gain a foothold in the Southeast Asian market.

This initiative follows POSCO’s sale of its 1.1 million ton stainless steel plant in China to Tsingshan in July 2025, signaling a strategic shift in the manufacturer’s focus. The asset reallocation allows POSCO to position Southeast Asia as a new base for stainless steel production.

POSCO already operates the Krakatau POSCO plant in Indonesia, an integrated steel complex with a capacity of 3 million tons per year, which has been in operation since 2013. The new project in collaboration with Tsingshan will further strengthen the company’s presence in the region and enable it to expand its stainless steel production to meet growing demand in the Southeast Asian market.

POSCO has accelerated the restructuring of its overseas non-core subsidiaries, divesting its electrical steel division in China and its construction subsidiary in Vietnam. These moves reflect a broader strategy to exit low-profitability foreign operations and focus resources on fast-growing sectors.