Kumenindo to set up petrochemical plant in W. Java<\/p>\n
JAKARTA (JP): PT Kumenindo Kridanusa, a consortium of six
\ncompanies headed by Fadel Muhammad, will set up a cumene-based
\npetrochemical plant in Balong Indramayu, West Java next year,
\nwhich is expected to start production in early 2000.<\/p>\n
"Our production capacity will be 160,000 tons of cumene (raw
\nmaterial for making high-grade plastics) per year," Fadel
\nMuhammad, president of the Bukaka Group, said here yesterday.<\/p>\n
He was speaking to reporters after he and the U.S. Ambassador
\nto Indonesia, J. Stapleton Roy, signed an agreement on a grant of
\nUS$206,000 from the U.S. government through the U.S. Trade and
\nDevelopment Agency to Kumenindo Kridanusa.<\/p>\n
Fadel, who is chief commissioner of Kumenindo Kridanusa, said
\nthat the new petrochemical company will use the grant to fund a
\nfeasibility study on the petrochemical plant project.<\/p>\n
The study, which will cost $206,000, will be conducted by M.W.
\nKellogg, a U.S. engineering consultant company, and is expected
\nto be completed in August.<\/p>\n
"Hopefully, we can start the development of the plant early
\nnext year," he said, adding that it usually takes three years to
\ndevelop a mid-stream chemical industry.<\/p>\n
He pointed out that Kumenindo is still open to foreign
\ninvestor participation.<\/p>\n
At present, it is a consortium of six companies owned by six
\nyoung businessmen. Fadel's company, the Bukaka Group, is among
\nthe six. He declined to identify the other companies.<\/p>\n
Fadel said that many foreign investors have already expressed
\nan interest in joining.<\/p>\n
"Several experienced petrochemical companies from the United
\nStates have already expressed an interest in joining Kumenindo in
\npetrochemical development," he said. He refused to identify the
\nAmerican companies.<\/p>\n
Asked about the total investment that will be needed for the
\nplant, Fadel said that he could not yet give an exact amount,
\nbecause he has to wait for the results of the feasibility study.<\/p>\n
But Don Bernard, M.W. Kellogg's representative in Indonesia
\nobserved that, based on the experiences of other countries, a
\nplant with this capacity will need an investment of between $300
\nmillion and $400 million.<\/p>\n
Fadel said that Kumenindo will get its raw materials from
\nlocal sources. "We are checking into the possibility of getting
\npropylene from Chandra Asri," he said.<\/p>\n
The Chandra Asri olefin center, the first in the country, is
\nlocated on West Java's western coast.<\/p>\n
Kumenindo's end products will be high-grade plastics, which
\nare in strong demand by many industries, including the
\nmanufacturers of automobile parts. The high-grade plastics used
\nin Indonesia are currently imported.<\/p>\n
Asked whether the establishment of the company is related to
\nPT Timor Putra Nasional's plan to produce a national car called
\n"Timor", he said, "We had planned this project long before the
\ngovernment announced the national automobile program.<\/p>\n
"We will sell our products to all companies that require them.
\nThis includes Timor Putra Nasional, but also others," he said.
\nHe added that his company manufactures the products for both
\nexport and the local market.<\/p>\n
Recently, Fadel said that Hutomo Mandala Putra, the youngest
\nson of President Soeharto and owner of Timor Putra Nasional, had
\nagreed that the Bukaka Group would supply car components to Timor
\nPutra, which will start its car production later this year. (13)<\/p>",
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"sponsor": "Okusi Associates",
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