Humpuss breaks ground for new methanol plant<\/p>\n
BONTANG, East Kalimantan (JP): The Humpuss Group, through its
\nsubsidiary PT Kaltim Methanol Industry, yesterday started
\nbuilding the country's first privately-owned methanol plant in
\nthe Kaltim Industrial Estate here with an investment of US$300
\nmillion.<\/p>\n
State Minister of Investment Sanyoto Sastrowardoyo officially
\nbroke ground for the plant, which will have an annual production
\ncapacity of 660,000 metric tons.<\/p>\n
\"I hope the presence of this plant in this industrial estate
\nwill encourage other private investors to come to this area and
\nother parts of the eastern provinces,\" Sanyoto said.<\/p>\n
Hutomo (Tommy) Mandala Putra, chief commissioner of the
\nHumpuss Group, said 60 percent of the plant's products would be
\nexported to Japan, South Korea and Taiwan.<\/p>\n
The company, the second of its kind in Indonesia, is scheduled
\nto start commercial production in 1997 and start exports in 1998.
\nIts raw material, natural gas, will be supplied from the nearby
\ngas fields of the state-run oil company Pertamina, Total
\nIndonesie, Unocal and Vico.<\/p>\n
So far Indonesia has only one methanol plant with a production
\ncapacity of 330,000 tons per year, operated by Pertamina on Bunyu
\nisland, East Kalimantan.<\/p>\n
Indonesia currently still imports some 140,000 tons of
\nmethanol as Pertamina's methanol plant produces only 260,000 tons
\nper annum, while domestic demand stands at some 400,000 tons.<\/p>\n
Sanyoto predicted that domestic demand for methanol would
\nincrease by an average of nine percent per annum. \"By the year
\n2,000, we will need between 650,000 tons and 700,000 tons of
\nmethanol per annum.\"<\/p>\n
Methanol is used as a solvent, anti-freeze, refrigerant and
\nchemical intermediate and is a major component in the production
\nof plywood glue. One third of world methanol consumption is for
\nthe production of formaldehyde, the major use of which is in the
\nproduction of phenol, urea, melamine resins and plastics.<\/p>\n
Debt<\/p>\n
When asked about the ratio of the company's debt to its
\nequity, Tommy said 70 percent of the investment came from loans
\nfrom the Japan's Exim Bank and a number of Japanese commercial
\nbanks, with Nissho Iwai Co. as the lead arranger.<\/p>\n
Initially, the state-owned PT Pupuk Kaltim, the owner and
\noperator of the Kaltim Industrial Estate, took 20 percent of
\nKaltim Methanol shares.<\/p>\n
However, the government team which controls offshore borrowing
\nbarred Pupuk Kaltim from acquiring any share in the company
\nbecause it would use a large portion of offshore loans. Because
\nof this, the construction of the plant, which was initially
\nscheduled to commence in 1991, was postponed until yesterday.<\/p>\n
Abdul Wahab, president of Kaltim Methanol, explained that the
\nloans from Japan would mature in 13 years, including a grace
\nperiod of three years, and carry an interest rate of two percent
\nto three percent per annum.<\/p>\n
\"I'm sure if the price of methanol on the international market
\nbounces back to last year's level, we can recover our investment
\nin five years,\" Wahab said, adding that last year methanol sold
\nat $500 per metric ton. However, he declined to mention the
\ncurrent price.<\/p>\n
In addition to Kaltim Methanol, the Humpuss Group has PT
\nHumpuss Karbometil Selulosa and PT Humpuss Aromatik in its
\npetrochemical division.<\/p>\n
\"Next month, we will start the construction of our aromatic
\nplant in Aceh,\" Tommy said, adding that the plant would cost some
\n$850 million. (rid)<\/p>",
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