MOPR512 – Business Decision Analysis Prepared By M. Isa Riyadhi MME 153091010
Jakarta [August 12th, 2009]
Is POSCO A Perfect Match for KS? Last week, another steel giant has popped again on the front page of a prominent business newspaper titled “Posco Is Ready to Invest”. A world-class steel producer came down from the Republic of Korea to meet with key official of the Indonesian government at the Ministry of Industry to present its proposal with total investment of up to US$ 2.5 Billion. Remarkably, this is one of the news where you hear a huge investment with big numbers for a steel project in Indonesia where most of the world pools of funds are suffering from dried-up liquidity. As we all know, steel is an alloy consisting mostly of iron with carbon content depending on the grade. During prehistoric time iron came from the falling meteors. It was known in antiquity. The earliest known first wrought iron used by mankind is a piece of ironware excavated from an archaeological site in Anatolia (Turkey) aged at about 4,000 years old.
New methods of producing steel by carburizing bars of iron in the cementation process were devised in the 17th century AD. In the Industrial Revolution, new methods of producing iron bar without charcoal were devised and these were later applied to produce steel. In 1857, Sir Henry Bessemer invented a new steelmaking process, involving blowing air through molten pig iron, to produce mild steel making it a practical and cost-effective for mass-production, and thus he became the inventor of the first process of massproducing steel inexpensively. The Steel industry was then really born in the second half of the 19th century. Investment in steel industry has been recognized for its huge withdrawal of capital funds since the industrial revolution. Governments have been backing up these investments since the past and few believed that steel is the country’s economic development driver. One day in 1969, a...