Asahi to join in ammonia project
Asahi to join in ammonia project
JAKARTA (JP): Asahi Chemical Co. Ltd. of Japan will join PT
Kaltim Parna Industri, a joint venture between two Indonesian
companies and Mitsubishi Corporation, to build a US$240 million
ammonia plant in Bontang, East Kalimantan.
The company's chief commissioner Marihad Simbolon said Asahi
Chemical had bought 10 percent of Mitsubishi's stake in PT Kaltim
Parna Industri to take part in the joint venture company.
The acquisition, which will be formally signed today, would
change the share ownership in PT Kaltim Parna Industri, with
Mitsubishi Corp. holding 55 percent instead of its previous 65
percent stake.
Asahi Chemical would hold 10 percent while local partners PT
Parna Raya would own 25 percent and PT Pupuk Kaltim's Pension
Fund the remaining 10 percent.
"Under the joint venture agreement, Asahi Chemical will be the
main customer of the plant's product, by importing around 30
percent of the production per year," Marihad said.
The plant, which is scheduled for commercial operation by the
middle of 2000, will have an annual production capacity of around
500,000 metric tons.
Marihad said that the company's Japanese shareholders,
Mitsubishi Corporation and Asahi Chemical, would provide loans of
up to 80 percent of the total investment to finance the project,
while the remain 20 percent would be taken from the shareholders'
equity.
Kaltim Parna Industri's president Naohiko Munakata said that
the plant had a bright future, given a continued increase in the
demand of ammonia products in Indonesia and other Southeast Asian
countries.
Nurhadi B. Santoso, the company's production director said
that local demand for ammonia had reached around 100,000 metric
tons per year, and was expected to increase to around 300,000
metric tons per year by 2000 due to operation of new downstream
chemical industries producing fertilizers, synthetic fibers and
ammonium nitrate.
The ammonia will be used to make basic materials for synthetic
fibers, he added.
He said the company planned to export at least 75 percent of
its product, around 350,000 metric tons, to Japan, Thailand, the
Philippines, China and other Asian countries, while the remaining
25 percent would supply local markets.
Asked why the Japanese firms chose to invest in Indonesia in
the current unfavorable economic condition, Munakata said that
the companies had made a long study in making the decision, and
they believed that their investment would yield a good return
over the long term.
"It's going to be a very long-term investment, but the
currency crisis is a temporary condition. We believe it will be a
great investment for the future," he said.
PT Parna Raya, established 25 years ago, focuses in shipping,
freighting, land transportation and trading.
Its partner Mitsubishi Corporation, one of the largest
companies in the world, has a widely-diversified business in
manufacturing, distributing, and the trading of production and
services.
Its other partner, Asahi Chemical Co. Ltd., is one of the
largest chemical companies in Japan. Asahi Chemical is currently
developing several downstream industries for ammonia in Japan and
other Asian countries. (08)