Apac to build power plant to cut production costs

JAKARTA (JP): Publicly-listed PT Apac Centertex Corp., a garment producer, plans to build a 100 megawatt (MW) cogeneration power plant in Bawen, Central Java, soon to reduce its production costs.

"By building our own power plant, we'll be able to generate cheaper electricity and at the same time produce steam for our textile plants," company president Benny Soetrisno said yesterday.

Apac signed an agreement yesterday with East Asia Power Resources Co. of the Philippines and PT Super Indah Makmur to develop the US$100 million power plant.

He said Apac and the two companies had set up an equally-owned venture, PT Vita Daya Harapan, to own the power plant.

He said PT Vita Daya Harapan would build the cogeneration power plant under a 20-year build, operate and transfer scheme with PT Apac. The plant will burn gas from Shell Mulia on the northern coast of Central Java.

The power station will initially have an installed capacity of 50 MW but this will double in 1999, he said.

"Currently, we need between 40 MW and 50 MW, our power demand will increase to about 70 MW. So we'll have a reserve of about 30 MW," he said.

The $100 million investment will be 75 percent funded by a syndicated loan from foreign and local banks and 25 percent by equity funds.

He said the electricity would be sold to PT Apac for $0.06 per kilowatt hour (kWh), while the steam, which is now produced by burning oil, would cut about $12 an hour off operation costs.

"The power plant will produce about 25 tons of steam an hour," he said.

He was confident the cost savings would help PT Apac, which suffered a Rp 2.93 billion ($1.3 million) operating loss last year.

PT Apac Centertex received Rp 408 billion in fresh funds from its rights issue in July. The company acquired a 94.12 percent of PT Apac Inti Corpora in August.

PT Apac Centertex is controlled by Johannes B. Kotjo and Bambang Trihatmodjo, the second son of President Soeharto. PT Super Indah Makmur, a packaging subsidiary of engineering company Van der Host, is owned by Johannes B. Kotjo. (bnt)