PKT to spend US$140 million on capital expenditure in 2010

Nani Afrida, The Jakarta Post, Jakarta | Thu, 12/24/2009 9:57 AM

State fertilizer producer PT Pupuk Kalimantan Timur (PKT) plans to spend US$140 million in capital expenditure next year, mostly on building a new coal-fired power plant.

“We will spend $120 million of capex on constructing the plant” PKT President Director Hidayat Nyakman told journalists on the sidelines of new factory ceremony in West Java on Wednesday.

PKT also plans to spend $15 million on new factories and about Rp 400 billion on its cooperation with several plantation companies.

Hidayat said that the company will mobilize the capex from internal cash flow and loans from banks, including state bank PT Bank Rakyat Indonesia (BRI), which has committed $100 million for PKT.

“We will receive gas supply in the beginning of next year, so that it will be easy for us to get some loans from banks,” Hidayat said.

By the end of this year, about 208,000 tons fertilizer from PKT will be exported, he says.

“Vietnam and Thailand have won the biddings [for the purchases],” Hidayat said.

PKT, a subsidiary of state fertilizer company PT Pupuk Sriwijaya (Pusri), now operates five urea fertilizer factories with a total capacity of 2.98 million tons per year.

It also operates four ammonia factories with a total capacity of 1.85 million tons per year.

PKT is the biggest fertilizer producer in Indonesia as it supplies two-thirds of the country’s urea fertilizer production.

The company aims to produce 3 million tons of urea next year.

In the first half of the year, the company’s revenue dropped by 26 percent to Rp 3.7 trillion ($373.7 million) on the back of lower fertilizer prices, meanwhile its profits before tax stood at Rp 370 billion.

In 2008, the company booked Rp 627.8 billion in net profits, a 52 percent increase from a year earlier.

Domestic consumption of fertilizers currently stood at 1.4 million per year. The government predicts that in 2025 Indonesia will need about 23.2 million tons which will have to be provided by fertilizer producers.

On Wednesday, the government officially opened a new factory belonging to state fertilizer PT Pupuk Kujang, which can produce up to 100,000 tons of NPK granules per year to help meet growing domestic market demand.