Pupuk Iskandar Muda to increase capacity

JAKARTA (JP): State-owned fertilizer company PT Pupuk Iskandar Muda in Lhokseumawe, Aceh, will start building its second production unit in October with a capacity of 600,000 tons a year.

The company's president, Omay Kumar Wiraatmadja, said the new US$252.35 million plant would be completed in 2000.

"When the new plant starts commercial operation late in 2000, our production capacity will double to about 1.2 million tons a year," Omay was quoted by Antara as saying in Banda Aceh yesterday.

He said the new plant, called Pupuk Iskandar Muda II (PIM-II), would get its gas feedstocks from the Asamera field in South Sumatra.

The fertilizer firm will sign a 20-year purchase contract with state-owned oil company Pertamina within two months, he said.

Omay said the government had appointed state-owned building firm PT Rekayasa Industri as the plant's main contractor.

Several foreign firms wanted to become Rekayasa's partners in building the plant, he said.

"All of them meet our criteria, but we will choose only one foreign partner," he said.

The foreign firms include the U.S.'s M.V. Kelogg, Japan's TEC, MHI and Chiyoda, Italy's Snamprogetti and Tecnimont, and Germany's Uhde.

Omay said the expansion was to anticipate surging demand for fertilizer next century.

"Our main target is to meet the growing domestic demand for fertilizer but a small amount of our production will be exported, mainly to China and other Asian and African countries," he said.

He said the new plant would guarantee fertilizer supply for Aceh, North Sumatra and Riau.

Besides PT Pupuk Iskandar Muda, Indonesia has five other fertilizer makers. They are PT Pusri in South Sumatra, PT Petrokimia Gresik in East Java, PT ASEAN Aceh Fertilizer Plant in Aceh, PT Pupuk Kujang in West Java, and PT Pupuk Kalimantan Timur. All are state-owned companies.

Indonesia produces six million tons of fertilizer a year, while annual domestic demand is for about 4.5 million tons. (bnt)