Nissho Iwai Corp approve $260m loan for Humpuss
Nissho Iwai Corp approve $260m loan for Humpuss
JAKARTA (JP): Nissho Iwai Corporation of Japan yesterday
approved an offshore loan worth US$260 million for PT Kaltim
Methanol Industri (KMI), a subsidiary of Humpuss Group, for the
construction of its $330 million methanol project in Bontang,
East Kalimantan.
The loan agreement was signed by Nissho Iwai Corporation's
general manager, Sekio Hara, KMI's president, Abdul Wahab, and
the junior director for Humpuss' project development, Bernardino
M. Vega, at a ceremony here yesterday.
Wahab said during the signing ceremony that the loan, which
comes from Japan Export Import Bank and a syndication of some
Japanese commercial banks, will have maturity of 13 years with a
three-year grace period.
"The loan, which has been arranged by Nissho Iwai, will carry
an interest rate of two percentage points above the London
Interbank Offered Rates (Libor)," Sekio told reporters after the
ceremony.
Upon completion, the methanol project will have a capacity to
produce 660,000 tons of methanol per year.
On Aug. 6, KMI -- a subsidiary of Humpuss Group Indonesia led
by President Soeharto's son, Hutomo (Tommy) Mandala Putra --
appointed Lurgi Oil-Gas-Chemie Gmbh of Germany to construct the
methanol plant starting January next year.
The project, scheduled to be on stream in 1997, will be the
second methanol plant in the country after the first one
established by the state oil company Pertamina in 1983 on Bunyu
island, East Kalimantan, which has a capacity of 330,000 tons per
annum.
Wahab said that the natural gas, which is one of the methanol
industry's primary raw ingredients, will be supplied by
Pertamina's contractors, such as Total Indonesia, Unocal and
Vico, from their natural gas fields in Kalimantan. "We have
reached an agreement with the companies to supply natural gas to
KMI's plant for 30 years," he said.
According to Wahab, around 40 percent of the methanol to be
produced by KMI in Bontang will be supplied to the domestic
market and the other 60 percent will be bought by Nissho Iwai for
distribution in Japan and other countries.
Yesterday's loan deal also included Nissho Iwai's signing of a
purchase agreement with KMI. "Prices will depend on market
developments in 1997 when the plant starts production," he said.
Stake
Sekio told The Jakarta Post that his company has planned to
buy a 20 percent stake in KMI to secure the production and supply
of methanol.
"We are now negotiating with the Humpuss Group to take over a
20-percent stake in KMI," he said, adding that his company has
the green light for share-holding from the Humpuss Group.
KMI is 80 percent owned by Humpuss Group and 20 percent by
Hutomo personally.
"The methanol industry has a very bright future," Sekio said.
He added that the price of methanol is around $500 per ton now
and might increase in the future.
Nissho Iwai now imports methanol from Malaysia, Saudi Arabia,
Venezuela and Canada. The world's annual demand for methanol is
estimated at nine million tons, of which some 4.5 million tons
are supplied by Canada's Methanex company.
According to Wahab, Indonesia's demand for methanol reaches
460,000 tons per year. (fhp)