Pusri plans to build fertilizer plant in Mideast or N. Africa

Thursday, August 09, 2007
The Jakarta Post, Jakarta

PT Pupuk Sriwadjaya (Pusri), a holding company of state-owned fertilizer manufacturers, plans to build a plant in the Middle East or in North Africa to cope with Indonesia's increasing demand for non-urea fertilizers.

Pusri president director Dadang Heru Kodri said here Tuesday that Pusri was exploring the possibility of constructing a factory in Iran, Jordan, Morocco or Egypt.

PT Petrokimia Gresik, a Pusri subsidiary that produces non-urea fertilizers, had sent representatives to those countries to explore the possibilities, said Dadang.

He said the plan to build a factory in the Middle East or North Africa was the result of difficulties in procuring raw materials for the production of SP 36 fertilizers (super phosphate with 36 percent phosphorous pentoxide).

SP 36 fertilizer is made from three main raw materials -- phosphate, gas and potassium -- with the first of these being in short supply in Indonesia, said Dadang.

"Indonesia usually imports phosphate from China but recently China seems reluctant to export phosphate to Indonesia, while the price on the international market is getting higher," said Dadang.

Besides China, Indonesia also relies on countries in the Middle East for the raw materials for SP 36 fertilizer.

Pusri said that the total cost of the construction of the plant could reach Rp 2 trillion (about US$219.7 million). As the holding company of the state-owned fertilizer producers, it has submitted proposals for the financing of the construction of the plant to the Ministry for State-owned Enterprises.

Currently, PT Petrokimia Gresik is the only state enterprise that produces SP-36 fertilizer, and has a capacity of 800,000 tons per year, far below the domestic demand of 2.4 million tons per year.

Chairman of the Farmers' and Fishermen's Contact Group, Winarno Tohir, said the plan to build the fertilizer plant would solve the problem caused by the lack of SP 36 fertilizer.

At present, many farmers use other fertilizers, such as NPK (Nitrogen, Phosphorous and Potassium), and organic fertilizers, due to the lack of SP 36 fertilizer.(02)