Fertilizer firm to build new plant worth $104.2m

JAKARTA (JP): PT Pupuk Kalimantan Timur, a state-owned fertilizer firm, signed an agreement here yesterday with a consortium of PT Rekayasa Industri and Chiyoda Corporation of Japan to build new production unit worth US$104.2 million.

"The new unit will use environmentally-friendly technology, which will enable it to turn its liquid wastes into clean water and to reprocess the released carbon dioxide gas to become a raw material together with ammonia for the making of urea fertilizer," Pupuk Kalimantan Timur's president, Syaiful Anwar, said at the signing ceremony at the Ministry of Industry and Trade office.

The company's existing production units simply release their liquid wastes as pollutants into the sea and gasses into the air, he said.

When it starts production in 1999, the new unit will produce 570,000 tons of urea fertilizer a year, bringing its total annual production to 2.4 million tons. The establishment of the new unit, therefore, will make the company the largest urea producer in the country, he said.

Syaiful said that 50 percent of the costs for the new unit's construction will be financed with equity and the remainder with loans from domestic private and state-owned banks.

Secretary-general of the Ministry of Industry and Trade, Aidil Juzar, said in his speech that with the new unit, Indonesia will be able to assure adequate supplies of fertilizer on the domestic market.

Aside from PT Pupuk Kalimantan Timur, the government has five other fertilizer producers -- PT Pusri in South Sumatra, PT Petrokimia Gresik in East Java, PT Pupuk Iskandar Muda and PT Aceh Fertilizer Plant in Aceh, and PT Pupuk Kujang in West Java.

According to Syaiful, Indonesia's total production of fertilizers currently reaches six million tons a year, exceeding the annual domestic demand of about 4.5 million tons. (jsk)