Kujang to Build Rp6.8 tln Fertilizer Plant

09 January, 2012 | Source: The Jakarta Post

Jakarta (ANTARA News) - State fertilizer company PT Pupuk Kujang is planning to build another unit of its plants called Kujang IC at a cost of Rp6.8 trillion (US$800 million), its president director said.

"The plant Kujang IC will replace the plant Kujang IA which is more than 30 years old," Achmad Tossin said on the sidelines of a function marking the signing of an agreement on refinancing Kujang`s debts to Japan Bank for International Cooperation (JBIC) here on Wednesday.

The plant IC is scheduled to start operating in 2017, he said.

The plant would have a production capacity of 900 thousand to 1 million tons, or higher than the combined production capacity of the plants Kujang IA and IB which reached 570 thousand tons per year, he said.

Feasibility and technical studies for the construction of the plant IC had been completed, he said adding the company was now waiting for the results of a financial study to determine the financing aspect of the project.

"Nearly 70 percent of the financing source will likely come from banking loans and the remaining 30 percent from the company`s internal cash," he said.

But he added that the financing of the project would depend on the company`s debt-to-equity ratio. Therefore, domestic banks` role in the development of the fertilizer industry was badly needed.

The plant IC would be built in Cepu, Central Java, so that it would be close to the Block Cepu gas source, he said.

"It is most likely the plant will be built in Cepu but it can also be built in Bojonegoro (East Java), depending on the decision of Pusri Holding because Kujang is a subsidiary of Pusri Holding," he said.

Kujang operations director Yuni Suryanri said once the construction of the plant IC was completed the company would have a combined production capacity of 1.1 million to 1.4 million tons per year. The plants IA and IB now have a production capacity of 570 thousand tons each.

 

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