The signing of the documents was witnessed by Indonesian Coordinating Minister for Maritime Affairs Luhut Binsar Panjaitan and Head of Indonesia's Investment Coordinating Board (BKPM) Thomas Lembong. The carbon steel factory will have an annual installed production capacity of 3.5 million tons.

Harjanto, Director General for International Industrial Defense and Development at Indonesia's Industry Ministry, said the two Chinese companies will not only build the carbon steel factory but will also build two power plants - each with a 350 MW capacity - in cooperation with Indonesian company Indonesia Morowali Industrial Park. Together, these projects are expected to give a boost to infrastructure development in the eastern part of Indonesia.

I Gusti Putu Suryawirawan, Director General of Metal, Machinery, Transportation Equipment and Electronic Industries at Indonesia's Industry Ministry, says the establishment of the carbon steel plant is important as it will reduce the need for imports of steel for the development of infrastructure projects in Indonesia, especially in the eastern part of the country. Currently, Indonesia only has steel plants in West Java and therefore it becomes costly to ship the materials to projects in the eastern part of Indonesia. Last year, Indonesia imported more than half of its steel consumption.