Pupuk Kujang to build new fertilizer factory

JAKARTA (JP): State fertilizer producer PT Pupuk Kujang will build a new plant in its industrial compound in Cikampek, West Java to replace its old production unit.

Pupuk Kujang's president Edi Madnawidjaja said here on Thursday that the company would spend about US$310 million for the construction of the new production unit

"We hope the construction of the new plant can start in June and begin commercial production in the middle of 2004," he told reporters following the signing of an agreement with Japan's Toyo Engineering Corp, the main contractor of the plant.

He said that the new plant, which would be named Kujang IB plant would replace the Kujang IA plant, which has been operating for about 25 years.

PT Kujang which started its commercial production in 1975 produces 330,000 tons of ammonia and 570,000 tons of urea per year.

Edi said the Japanese government would provide about US$250 million in export credits to finance the new plant, while the remaining $60 million will come from internal sources.

The construction of the Kujang IB plant is part of the government program to replenish the operation of state-owned old fertilizer plants.

Most of the country's fertilizer plants were established in the 1970s including those operated by PT Pupuk Kalimantan Timur and PT Petrokimia Gresik.

According to Edi, the new plant would use environmentally friendly technology, which could save up to 30 percent in energy compared to the existing plants.

PT Kujang is part of the South Sumatra-based PT Pupuk Sriwijaya (Pusri), which manages and operates four other fertilizer producers including PT Pupuk Iskandar Muda, PT Asean Fertilizer, both in Aceh, PT Petrokimia Gresik in East Java and Pupuk Kaltim in Kalimantan.

Their total production reaches about 6 million tons of urea per year.

All of the fertilizer plants except PT Asean Fertilizer sell larger part of their products to meet the local demand, which reaches about 4 million tons a year. (03)