Toyota Astra Motor is to buy steel products from Krakatau Steel for the production
of its Kijang utility vehicle.

Astra will purchase 160 tons of steel per month to manufacture Indonesia’s
best-selling model. The deal is worth Rp480 million ($US51,335) each month to
Krakatau, Indonesia’s only integrated steel producer, based in Cilegon, West
Java.

A delivery of around 3,000 tons per month would be required for the full replacement
of Taiwanese and Japanese steel for the Kijang model.

Astra have said however that state-owned Krakatau, earmarked for privatisation,
would firstly have to upgrade its steel in order to meet Toyota’s standards,
especially for interior applications.

Adi Rizal Nizar, Astra’s Technical Director, said that the company can save
around 20 per cent by using steel produced locally, as Indonesian steel is cheaper
and the shorter delivery times lower inventory.

Having already forged a relationship with Toyota Astra over the last three
years, Krakatau Steel says that, within two years, it can supply 80 per cent
of the steel for Kijang production.