Pupuk Indonesia Plans US$5.6 Billion Investment

Jakarta (Antara Bali) - PT Pupuk Indonesia Holding Company (PIHC) plans to invest up to US$5.6 billion until 2014 to revitalize urea fertilizer plants and convert gas to coal as the energy source in the plants to support food and energy resilience.

"Revitalization is needed as a lot of plants have already been more than 20 years old and also for efficiency," the company's president director, Arifin Tasrif, said here on Sunday.

As an example he referred to PT Pupuk Sriwijaya (Pusri) plant in Palembang, South Sumatra, which has been 38 years old (established in 1974) and is now still operating consuming up to 35 mmmbtu/tons of gas while a new plant only consumes 25 mmmbtu/tons. In view of that, he said he plans to build a new Pusri 2B plant whose tender is now under preparation.

He said PHIC also plans to set new urea plants in Gresik (Petrokimia Gresik) and in Bojonegoro (Pupuk Kujang), East Java, to meet fertilizers demand in Java, which has so far been supplied by PT Pusri Palembang and PT Pupuk Kalimantan Timur.

"The two new companies later will be able to save shipping cost up reaching US$30 per ton and gas cost reaching US$50 per ton," he said.

So far fertilizers needs in Java are met with supplies from PT Pusri Palembang and PT Pupuk Kalimantan Timur reaching 1.9 million tons a year and so with the new plants a total of US$57 million in shipping cost would be saved, he said.(*/M038)