Pupuk Kaltim awards contracts
Pupuk Kaltim awards contracts
JAKARTA (JP): State-owned fertilizer company PT Pupuk
Kalimantan Timur (Kaltim) has signed two agreements to build two
amonia plants in Bontang, East Kalimantan, expected to cost
US$480 million.
One of the two agreements, a joint-operation contract, was
signed yesterday by PT Pupuk Kaltim and two Japanese firms,
Mitsui Co. Ltd. and Tomen Corporation.
The two Japanese firms will build a plant to produce 2,000
metric tons of amonia a day. Construction of the plant is
expected to cost around $280 million.
Under the contract, the plant, scheduled to open in 1999, will
be jointly operated for 18 years by PT Pupuk Kaltim and the two
Japanese firms.
PT Pupuk Kaltim president director Syaiful Amir said the plant
would be handed over to PT Pupuk Kaltim after the 18-year
contract had expired.
"If the plant makes a big profit, there is a possibility that
the Japanese firms will hand the plant over to PT Pupuk Kaltim
after 16 years," Syaiful said.
Agreement
The other agreement, between PT Pupuk Kaltim's pension fund
foundation and Parnaraya Group, was signed several weeks ago. It
is a joint venture agreement to build another amonia plant in
Bontang with a daily capacity of 1,500 metric tons.
This plant, expected to cost $200 million, is scheduled to
open in 1999.
The joint venture, PT Kaltim Parna Industri, is 10 percent
owned by PT Pupuk Kaltim's pension fund foundation and 90 percent
by Parnaraya Group.
Syaiful said the contract with the two Japanese firms was the
first joint-operation scheme agreement to be signed by a domestic
fertilizer company.
PT Pupuk Kaltim chose a joint-operation scheme because funds
were hard to come by, he said.
Under both the agreements, PT Pupuk Kaltim will provide the
land, workers and operators for the amonia plants. The partners
will pay to build them.
Parnaraya Group will finance the construction of its plant
with $50 million in equity and a $150 million loan from the
domestic Bank Bumi Daya, said Marihad Simbolon, the president
director of PT Kaltim Parna Industri.
Syaiful said 70 percent of the amonia from the Japanese firms'
plant would be exported, and 30 percent would be used by PT Pupuk
Kaltim to produce fertilizer. Most of the amonia from PT Kaltim
Parna Industri's plant would be exported.
He said the Philippines bought most of Pupuk Kaltim's amonia.
State-owned oil company Pertamina will supply natural gas to
the plants "at a price cheaper than in foreign countries, so that
the amonia produced by the plants can compete on the
international market," he said.
Amonia costs about $200 a metric ton on the international
market, Syaiful said. (jsk)