Joint venture to build $70m lube oil plant
Joint venture to build $70m lube oil plant
JAKARTA (JP): State oil and gas company Pertamina has set up a
joint venture to build a US$70 million lube oil blending plant in
North Jakarta to add to the domestic supply.
Pertamina president Soegianto said yesterday the joint
venture, PT Pertajaya Lubrindo, would produce 100,000 kiloliters
of lubricant and 8,000 kiloliters of grease oil a year at its
production facilities at the Nusantara industrial bonded zone in
Marunda.
The plant was expected to begin operations in early 1999,
Soegianto said during the groundbreaking ceremony of the plant.
Soegianto said the country's demand for lubricants was 400,000
kiloliters per year with an average growth of 2 percent a year.
Pertamina's lubricant plants supplied 95 percent of demand while
the other 5 percent was imported.
"This plant is expected to cover domestic demand for imported
lubricants," he said.
He said the project had received approval from the Investment
Coordinating Board in April 1996.
Soegianto said Petrajaya Lubrindo was Pertamina's first joint
venture with private partners to produce lubricants.
The joint venture is 40 percent owned by Pertamina, 30 percent
by Mobil Oil and 30 percent by PT Citra Pelumas Andalan.
Citra Pelumas is a consortium made up of four companies: PT
Binajasa Hantarindo, a subsidiary of PT Bimantara Citra,
controlled by President Soeharto's son Bambang Trihatmodjo; PT
Kartika Eka Paksi Utama, a business wing of Army foundation
Yayasan Kartika Eka Paksi; PT Yekapepe Usaha Nusa, a business
wing of Pertamina's Employee Welfare Foundation; and an
independent company PT Prizaco Perkasa.
Soegianto said Pertamina also planned to develop two other
lubricant plants in Medan, North Sumatra, and in Ujungpandang,
South Sulawesi.
The Medan plant will be built by a joint venture of PT Caltex
Pacific Indonesia and the Ujungpandang plant by a joint venture
of the Chinese Petroleum Company.
Petrajaya Lubrindo president Pian Tandjoeng said under the
agreement the lubricants and grease produced by the company would
carry the Pertamina and Mobil brand names.
He said Mobil and Citra provided $14 million in equity for the
joint venture, while Pertamina provided $10 million in land for
the plant. (jsk)