Djajanti signs deal worth $600m with Taiwan
TAIPEI (JP): Indonesia's Djajanti Group secured an agreement yesterday with Taiwan's China Development Corporation (CDC) for the construction of a US$600-million cement factory on the Seram island in Maluku.
"The cement factory will have an initial capacity of four million tons per year and 80 percent of its production will be exported to Taiwan," Djajanti's chairman, Burhan Uray, said after signing the agreement here.
Burhan explained that the two companies will establish a joint venture, called PT Maluku Dinamika Semen, to operate the cement plant.
The plant is expected to increase its annual capacity to 10 million tons after 10 years of operation.
Under the agreement signed by Burhan and CDC chairman Benny Liu at the CDC Tower in downtown Taipei, the two agreed not only to cooperate in cement, but also to foster future developments in shrimp farming, food processing projects and agricultural projects.
CDC, a state-owned company, will act as an investment bank in this project and take a 50-percent stake in the cement factory.
"CDC will use its expertise in financial and project management, while the Djajanti Group will be the provider of capital, resources and infrastructure," said Aaron P. White, assistant to the president of Djajanti Group.
Though Indonesia and Taiwan do not have diplomatic relations, the two countries continue to have highly amicable economic ties. Taiwan is currently Indonesia's third largest foreign investor with over $8.5 billion.
Relations have blossomed further with President Lee Teng-hui's "vacation" to Bali last February.
Production
Elaborating further on the cement factory, Burhan said he expects the factory to begin production within three years.
"This is an ideal time because Taiwan will be closing a number of its cement factories around the time we begin production," he said.
He further revealed that the Indonesian government, through the Investment Coordinating Board (BKPM), has given its full approval for the project.
Aburizal Bakrie, chairman of the Indonesian Chamber of Commerce and Industry (Kadin), witnessed yesterday's signing and expressed his delight at the planned project because he thought it would facilitate development in the eastern part of Indonesia.
The planned cement factory alone is estimated to create some 3,000 new jobs and spur additional development in the region with facilities such as ports, roads and a hydro-powered electric plant to accommodate the factory's large energy needs.
Aburizal also said that future development in such as areas as aquaculture will be highly beneficial to the region.
Its very encouraging since areas such as shrimp farming will be able to utilize and expand the many shrimp farmers in Maluku and Irian Jaya, he said.(mds)