SE Sulawesi to house asphalt plant

JAKARTA (JP): The South East Sulawesi administration signed an agreement with two state-owned companies yesterday on the establishment of an asphalt extraction plant in Lawele, South East Sulawesi, at a cost of Rp 275 billion (US$114.5 million).

The agreement was signed in Kendari, the province's capital, by South East Sulawesi Governor La Ode Kaimoeddin, PT Sarana Karya president Susanto Harjosukanto and PT Hutama Prima president Toki Sugiarto. Sarana Karya and Hutama Prima are state- owned companies overseen by the Ministry of Public Works.

Toki said the plant, which would use asphalt rocks from Buton island in South East Sulawesi, would have a production capacity of 75,000 tons a year after the first phase of construction in 1998 and 300,000 tons a year after the completion of the project in 2000. The plant would employ about 400 personnel.

The construction of the plant will start in May.

Toki said Sarana Karya, the concessionaire of the asphalt mine in Buton, would supply about 1.5 million tons of asphalt rocks a year for the plant.

Buton estimated a reserve of 450 million tons of asphalt rock, he said.

Toki said the plant would be the first in the world to extract Buton's natural asphalt rocks.

Kaimoeddin said the local administration would invite Japanese firms Nisho Iwai and Nigata Engineering to help finance the asphalt project.

Toki said 60 percent of the asphalt production would be sold domestically and the remainder exported.

Susanto said there would be no problem marketing asphalt because the government had shown its commitment to use Buton asphalt for building roads.

Buton asphalt is suitable for road construction in tropical countries because it has a very high melting point.

Governor Kaimoeddin said the provincial administration would support the establishment of the asphalt plant by building a port, communications and electricity networks and other infrastructure.

Toki said the plant would also produce a million tons of lime stone, a basic material for cement production, as a by-product.

"Once the first phase of the asphalt plant begins producing, we will build a cement plant in cooperation with an Austrian investor," he said.

He said its construction might take three years. (10)