Pertamina makes quality asphalt

State-owned oil and gas company Pertamina has started to produce high grade asphalt to compete with imported products, a company official said.

M. Herijanto, managing director of PT Petro Kimia, Pertamina's subsidiary which produces asphalt, said that the move was crucial to prevent the company from losing market share at home to imported products.

Pertamina produces two high grade types of asphalt, namely Pertamina Retona and Aspal Prima (Prime Asphalt).

"It took some thorough research. And we have worked with various universities to produce high grade asphalt," Herijanto said on Wednesday, adding that high quality asphalt products were needed for the construction of toll roads and airport runways.

"By having high grade asphalt, we hope to widen our market by providing various types of asphalt for various purposes," he said.

At present, Petro Kimia has an installed production capacity of 720,000 tons of asphalt every year. However, Herijanto said, Petrokimia only produces an average of 408,000 tons annually due to low demand on Pertamina's low grade asphalt.

Pertamina only produced straight run bitumen or asphalt base. Asphalt base is asphalt that has not undergone further alteration to advance its quality. Normally, it is used on secondary roads.

National asphalt demand reaches between 900,000 - 1 million tons annually.

By producing high quality asphalt, Pertamina expects to grab a portion of the market, which is currently dominated by imports, Herijanto said.

He said that Pertamina's new high grade asphalt had been tested on a toll road and a shipping port.

Petro Kimia is currently the sole asphalt producer in the country. In 2002, the company generated Rp 670 billion (US$75.28 million) in revenue with net profits of Rp 125 million.

Asphalt is only produced in Pertamina's Cilacap oil refinery since it has the type of crude oil needed for asphalt production.

Herijanto said Pertamina saw non-oil production as a more lucrative business in the future. --JP