SAIL-Krakatau Steel Partnership Targets $350 Million Stainless Steel Facility.

India’s state-run Steel Authority of India Ltd (SAIL) and Indonesia’s Krakatau Steel are planning an investment of up to $350 million to build a stainless steel slab plant in Indonesia, according to two Indian sources familiar with the matter.

The proposed facility will have an annual production capacity of 500,000 metric tons and is expected to begin operations within three to four years, the sources said.

The investment plan follows a preliminary agreement signed earlier this month between SAIL and Krakatau Steel to establish a joint venture for producing stainless steel slabs in Indonesia during Indian Prime Minister Narendra Modi’s visit to the country.

SAIL is expected to send a technical team to Indonesia next month to prepare a feasibility report. Following the study, the two companies will determine the equity structure of the joint venture, seek necessary government approvals and finalise other project details, the sources said.

The sources requested anonymity as the discussions are not public. SAIL did not respond to a Reuters request for comment, while Krakatau Steel also did not respond to a request for comment.

The plant’s capacity could be increased after it becomes operational, according to the sources. SAIL plans to use the entire output from the Indonesian facility and transport the stainless steel slabs to its Salem plant in Tamil Nadu for rolling and finishing, one source said.

The finished products will primarily be supplied to Indian customers, with a portion potentially exported to markets in the Middle East and Europe, the sources said.

SAIL was India’s third-largest steel producer in the financial year ended March 2025, accounting for 10.1% of the country’s domestic steel market, according to commodities consultancy BigMint.

India, the world’s second-largest crude steel producer after China, has been seeking greater cooperation with Indonesia and more than a dozen other countries to strengthen its steel sector, expand exports and secure critical raw materials.

Finished steel consumption in India has increased 55% over the past five years, outpacing the 42% rise in production, according to BigMint data. However, Indian steelmakers are increasingly focusing on domestic demand as tighter import measures in Europe and Britain weigh on exports, while competition from Chinese steel continues to challenge the industry.

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