Humpuss refrains from seeking protective tariff<\/p>\n
JAKARTA (JP): The Humpuss Group, which is now constructing a
\nmajor plant to produce methanol in East Kalimantan, promised over
\nthe weekend not to ask the government to introduce a protective
\ntariff on the importation of the chemical.<\/p>\n
\"We will never ask the government to impose a protective
\ntariff because the domestic demand for methanol is still far
\nabove the country's production,\" an executive of the group, Abdul
\nAziz Bahalwan, was reported by Antara on Saturday as saying in
\nProbolinggo, East Java.<\/p>\n
PT Kaltim Methanol Industri, a subsidiary of the Humpuss
\nGroup, has assigned Lurgi Oil-Gas-Chemie GmbH of Germany to
\nconstruct a methanol plant worth US$330 million in Bontang, East
\nKalimantan, with an annual capacity of 660,000 tons. The plant,
\nto be the country's second methanol factory after the first one
\nestablished by the state oil company Pertamina, is expected to
\nstart operating in early 1997.<\/p>\n
Bahalwan said Indonesia still largely depends on the
\nimportation of methanol, a chemical substance needed for the
\nproduction of plywood glue, from Saudi Arabia and Malaysia.<\/p>\n
According to the Ministry of Industry, Indonesia's demand for
\nmethanol is estimated at 460,000 tons per year, while the supply
\nfrom Pertamina is less than 330,000 tons, the designed production
\ncapacity of its methanol plant in East Kalimantan.<\/p>\n
Import<\/p>\n
Bahalwan said that Humpuss Group, which has been assigned by
\nthe government as sole distributor of methanol on the domestic
\nmarket, imports about 20,000 to 30,000 tons of methanol to meet
\ndomestic demand.<\/p>\n
He acknowledged that the Humpuss Group, as the first private
\nsector entity to produce methanol, actually has the right to ask
\nfor tariff protection from the government.<\/p>\n
\"But we will never ask for such protection in spite of tight
\ncompetition on the world market,\" he said.<\/p>\n
The government has since November 1994 lowered the import duty
\non methanol from 10 percent to five percent to help maintain the
\ncompetitiveness of Indonesia's plywood exports.<\/p>\n
Bahalwan said that the sale of methanol on the world market is
\nmonopolized by Methanec, a multinational company.<\/p>\n
Kaltim Methanol plans to export 60 percent of its production
\nand sell the remaining 40 percent domestically. It is financing
\n80 percent of the costs for its methanol project with offshore
\nloans from IKB Deutsche Industriebank AG of Germany and Nissho
\nIwai Corporation of Japan and the remaining 20 percent with its
\nown equity.(riz)<\/p>",
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"sponsor": "Okusi Associates",
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