Wed, 15 Mar 2000

Petrokimia starts NPK production in October

SURABAYA (JP): State-owned PT Petrokimia Gresik will begin production of a compound fertilizer in October this year, with an annual production level of about 300,000 tons, the company's president said here on Tuesday.

Rauf Purnama said the new fertilizer, known as NPK, would be produced in cooperation with PT Perkebunan Nusantara II, III, IV and V.

"The construction of the NPK fertilizer plant is 90 percent completed," he said following a meeting with East Java Governor Imam Utomo.

He said the construction of the fertilizer plant would cost the company and its partners about US$26 million.

The plant, besides supplying the needs of the four state plantation companies, will also produce fertilizer to be sold to farmers to boost their rice production, he said.

In a pilot project carried out in the village of Bintoyo, Ngawi regency, East Java, the use of the compound fertilizer was proven to increase rice production from 6.3 tons per hectare to 9.3 tons per hectare.

He acknowledged the compound fertilizer, which contains phosphate, nitrogen and potassium, would be a little bit more expensive than conventional fertilizers.

"Farmers need to spend Rp 200,000 for the fertilizer for one hectare of land. But it (the fertilizer) gives an added value of between Rp 1.6 million to Rp 2.4 million from the increased rice production per hectare, with the assumption that price of dried unhusked rice is Rp 800 per kilogram," he said.

The use of fertilizer in Indonesia is low compared to in Japan, Thailand, Malaysia and Taiwan.

"We hope that East Java will return to its glory as the national rice bowl, with a total production of 34 million tons per year," Rauf said, adding that orders for the new fertilizer also have come from Bali, Central and West Java.

PT Petrokimia Gresik also plans to construct a second NPK fertilizer plant with a capacity of 700,000 tons annually to meet the expected demand, he said. "The second plant is scheduled to be finished in 2003." (nur/sur)