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Old 19th October 2012, 01:33 PM   #1
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Default POSCO to lift Indonesia investment to $11 billion over next five years: Jakarta

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JAKARTA | Fri Oct 19, 2012 12:41am EDT

(Reuters) - South Korean steelmaker POSCO (005490.KS) will almost double its investment in Indonesia to $11 billion over the next five years, from $6 billion currently, Chief Economics Minister Hatta Rajasa said on Friday.
POSCO, the world's fourth-biggest steelmaker, already has a multi-billion dollar joint venture with Indonesian state-owned PT Krakatau Steel, the country's biggest steel producer.
"The additional investment is for further steel development -- cold steel, for energy development and for smelters development," Rajasa told reporters.
Earlier this year, the South Korean firm's affiliate POSCO Engineering & Construction, formed a consortium to build two 300-megawatt power plants on Indonesia's Sumatra island, worth around $1 billion.
Foreign direct investment in Indonesia stayed strong in the second quarter, showing the G20 member remained a magnet in a troubled global economy and that changes in mining ownership rules are not cutting investor appetite.
Between April and June, total FDI rose 30.2 percent year-on-year to a quarterly record of 56.1 trillion rupiah ($5.92 billion), the country's investment board said in late July.
The country got a boost at the end of last year when Fitch Ratings upgraded it to investment grade sovereign status on a par with India. But Europe's debt woes and a series of Indonesian government moves to limit foreign ownership have unnerved investors.
New investment is key to achieving the country's ambitious target of becoming a top 10 global economy by 2025 by selling more finished products rather than simply exporting raw materials, while improving its creaky infrastructure to achieve President Susilo Bambang Yudhoyono's target of 7 percent annual economic growth.
(Reporting by Yayat Supriatna; Writing by Michael Taylor; Editing by Jonathan Thatcher)
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