Kodeco expands activities in Irian Jaya
Kodeco expands activities in Irian Jaya
JAKARTA (JP): Korea Development Co. Ltd. (Kodeco) has been diversifying its businesses in Irian Jaya from timber into the exploration and development of gold, coal and minerals with an additional investment of up to US$140 million.
"We are entering the easternmost Indonesian province in a big way to develop its resources and create a lot of jobs for the local people," Kodeco's Vice President Choi Jae Won said here yesterday.
Choi said his investment expansion in the easternmost province was prompted by the smooth implementation of Kodeco's $72 million wood processing plant on Yapen island, north of Irian Jaya.
"Our wood industry will start trial production on April 5 with annual capacities of 56,000 cubic meters (m3) of plywood, 48,000 m3 of container flooring, 30,000 m3 of sawn timber and 14,500 m3 of mouldings," Choi added.
The industry, which will employ more than 1,500 workers, is supported by a 691,700 hectare forest concession owned by PT Mamberamo Alas Mandiri in the northern part of Irian Jaya.
"We have also obtained preliminary approval from the government to explore and mine gold and other minerals on Yapen island and to prospect for and produce coal in the Horna area near Manokwari, also in the northern part of Irian Jaya," Choi said.
The gold exploration and mining project will involve a total investment of $20 million and the coal venture $120 million. Both projects are being implemented by PT Kodeco Sansaporindo Mandiri.
"We firmly believe in the business prospects of Indonesia's easternmost region and will continue to look for new opportunities in addition to our big investment commitments in South Kalimantan," he added.
Choi said Kodeco and its partners-- PT Indocement Tunggal Perkasa of Indonesia and Marubeni Co. of Japan-- will conduct the first piling work at a $495 million cement plant near Batulicin, South Kalimantan, on April 8.
It was in Batulicin where Kodeco started up its Indonesian operations in 1968 in logging and later wood processing. Kodeco's founder and Chairman Choi Gye Wol was the pioneer of South Korean investment in Indonesia.
But Kodeco has now diversified into the manufacture of steel container boxes and several other businesses, including oil and gas mining near Madura island, East Java.
The cement plant, scheduled to come on stream in May 1998 with an annual capacity of 2.5 million tons, is 46 percent owned by Kodeco, 51 percent by Indocement and associates and 3 percent by Marubeni.
A $345 million loan financing package for the project was arranged by Fuji Bank of Japan and fully underwritten by several other international banks.
The construction of the cement plant will involve contractors and suppliers from Australia, Denmark, Japan, Singapore and Indonesia.
Kodeco and its local partner, Faisal Rizani, are also preparing the development of an oleochemical plant to process coconuts from almost 4,500 ha of plantations near Batulicin, Choi added.
The first stage of the project will involve an investment of $170 million and is scheduled to be completed in the middle of 1998 with an annual capacity of 66,000 tons of fatty acids and glycerin.
"We have concluded a memorandum of understanding with the Manila-based Asian Development Bank for $120 million in a financing package," Choi said.
The first stage will include the opening of at least 18,000 ha of hybrid coconut plantations, of which almost 4,500 ha have been planted, and several mills to produce such byproducts as coconut oil, coconut cakes, rubberized coir fiber, coir fiber matting, coconut shell charcoal and activated carbon. (vin)