Fri, 16 Apr 2010

From: The Jakarta Globe

By Arti Ekawati
Two Taiwanese companies plan to invest billions of dollars in Indonesia’s petrochemical and biofuel industries, Coordinating Minister for the Economy Hatta Rajasa said on Thursday.

He said that Taiwan-based oil and gas firm CPC Corporation planned to build a $2.8 billion petrochemical centre in Kalimantan, adding that the company had yet to decide exactly where to establish the project.

“They’re looking for the perfect location for the petrochemical centre,” Hatta told reporters on the sidelines of the Asia-Pacific Ministerial Conference on Public Private Partnerships for Infrastructure Development 2010.

He said CPC chose Kalimantan because of the availability of raw materials for the petrochemical project and the rapid development in the region.

He added that CPC planned to team up with a local partner, whether a private company or state-owned enterprise such as oil and gas company PT Pertamina, to develop the project. Teaming up with Pertamina would help ensure the supply of the necessary raw materials.

Hatta said that another Taiwanese company is seeking to develop a jatropha plantation to produce biofuel. He said the company has already obtained the necessary license from the local administration to develop a 100,000 hectare jatropha plantation in East Kalimantan. He did not disclose the name of the company nor the size of the planned investment.

Hatta said the Taiwanese investor asked the government to make the plantation area a special economic zone (SEZ), which among other benefits would allow the investor to be exempted from paying duties and taxes when importing equipment and raw materials.

He added that several investors from Japan, South Korea and China had also asked for similar treatment before investing in various business sectors in Indonesia.

“Many investors have expressed an interest in developing businesses here under the SEZ system,” he said.

He said the requests were in line with the government’s plan to develop several SEZs. For instance, the SEZ in East Kalimantan would be focussed on energy-related industries such as biofuels and petrochemicals.

Meanwhile, the SEZ in Sumatra will focus on oleo-chemicals as the region has vast palm oil plantations.