PT Petrokimia Gresik to suffer losses of $6.2m this year
PT Petrokimia Gresik to suffer losses of $6.2m this year
JAKARTA (JP): State-run petrochemical company PT Petrokimia
Gresik is expected to suffer losses of up to Rp 13.78 billion
(US$6.2 million) this year due to high interest rates and the
depreciation of its new ammonia and urea production units.
The company's president, Endarto, said in a hearing with the
Energy and Manufacturing Commission of the House of
Representatives here yesterday that Petrokimia Gresik had
borrowed $136 million from the World Bank, of which $126.2
million was used to finance its new projects.
The urea production unit, with an annual production capacity
of 460,000 tons, is the new plant at Petrokimia Gresik, while the
ammonia unit is the expansion project with an annual capacity of
445,000 tons. The two plants started commercial production last
December.
"It's normal to bear losses for the first and second year of
operation," Endarto said.
Besides urea, Petrokimia Gresik also produces other kinds of
fertilizer, such as TSP at an annual output rate of 1.2 million
tons, ZA at 650,000 tons, DAP at 80,000 tons and NPK at 50,000
tons. The company is the only producer of non-urea fertilizers in
the country.
He said the company's production costs have been increasing
because of high interest rates. Last year, the company set aside
Rp 74.96 billion for debt servicing, 50 percent higher than in
1993.
The company's total debts had reached Rp 1.31 trillion as of
last year, 8.26 percent higher than in 1993, while its total
assets as of last year stood at Rp 1.79 trillion.
Subsidy
In addition to high interest rates, Endarto said the
government eliminated its subsidy for the production of ZA and
TSP fertilizers -- two main products of Petrokimia Gresik -- last
October and that domestic fertilizer prices are still kept far
below international prices.
He noted that his company sells its TSP, Urea and ZA
fertilizers to the government at only $182, $79 and $105 per ton
respectively, as compared to the world market prices of $195,
$235 and $105, respectively.
He said that because his company's profits have dropped
steadily for the last five years, the profits will not offset
this year's projected losses.
Petrokimia Gresik's unaudited pre-tax profits dropped 56.89
percent to Rp 12.81 billion last year from Rp 29.72 billion in
1993.
To reduce this year's projected losses, Endarto said his
company will increase its exports now that the domestic demand
has been satisfied.
Besides Petrokimia Gresik, according to Minister of Industry
Tunky Ariwibowo, two other fertilizer companies are projected to
suffer losses this year.
The two firms are PT Pupuk Sriwijaya (Pusri), which is
estimated to lose up to Rp 88 billion, and PT ASEAN Aceh
Fertilizer, which may lose Rp 13.7 billion.
Pusri's projected losses might be caused by high interest
rates and the depreciation of its new expansion project, while
most of ASEAN Aceh Fertilizer's losses will likely come from the
fluctuation of foreign exchange rates. (rid)