Amid persistent pressures in the global steel industry, PT Krakatau Steel (Persero) Tbk shows it still has its edge. The state-owned steelmaker posted revenue of USD234.76 million, or approximately Rp3.88 trillion, in the first quarter of 2025.
It’s not just about the numbers. Krakatau Steel also managed to slash operating expenses by 11 percent. Gross profit reached USD12.95 million (Rp214.59 billion), with a gross profit margin of 5.52 percent. “We remain optimistic about the recovery and future performance of Krakatau Steel,” said President Director Muhamad Akbar Djohan in an interview at the company’s headquarters in Cilegon, Banten.
One of the new engines driving the company is the reactivation of the Hot Strip Mill 1 (HSM#1) plant at the start of 2025. Although not yet running at full capacity, the restart of HSM#1 marks an important turning point in revitalizing both steel and non-steel segments.
Cleaning Up Its Own House
Business transformation is the mantra Krakatau Steel now lives by. Comprehensive restructuring, operational efficiency, and the establishment of subholdings are among the key initiatives underway.
“The drop in operating expenses is no coincidence,” Akbar said. He explained that the management team has identified inefficiencies and addressed them methodically. “We’ve gone deep into the operational details of each business unit.”
As of March 31, 2025, Krakatau Steel’s total assets stood at USD2.92 billion (Rp48.35 trillion), up 0.82 percent from the end of 2024. In the midst of a tough industry climate, this modest increase is viewed as a sign of strengthened financial structure.
Downstream Strategy for Higher Margins
One of the company’s key strategic moves is downstream integration. Through its subholding Krakatau Baja Konstruksi, Krakatau Steel is targeting high-margin downstream steel products, especially for the construction sector.
“This is part of our strategy not just to be a producer, but to become a provider of material solutions,” said a senior official within the company.
Expanding the Export Market
The export market is also in focus. Krakatau Steel is working to expand its presence in international markets, including Europe and emerging countries. At the same time, the company is boosting utilization of its production facilities. HSM#1, once idle, is now expected to be a key contributor to export output.
“We don’t want to see idle capacity anymore,” said a technical officer in the production unit.
Krakatau Steel’s transformation is encapsulated in its theme, “Revolutionary Movements: Committed to Transform.” More than just a slogan, it’s the company’s framework for improving performance, strengthening corporate governance, and rebuilding investor confidence.
