State-owned fertilizer company PT Petrokimia Gresik signed a joint venture agreement with a Jordan investor, Jordan Phosphate Minse Co. Ltd, Monday to build a chemical factory in Gresik, East Java.
Both companies will spend US$200 million to build the factory, which is expected to produce up to 200,000 tons of phosphorus oxide, a raw material for phosphate-based fertilizers, annually.
Jordan Phosphate Minse, a long-time business partner of Petrokimia Gresik, is a mining company that has been supplying the raw materials for Petrokimia’s phosphate fertilizer products.
State SOE Minister Mustafa Abubakar said the agreement had been initiated in 2007 and was supposed to have been signed last year.
“We had to delay it because of the global economic crisis,” he told reporters at the agreement signing ceremony.
Mustafa added the factory would help Petrokomia, one of the biggest fertilizer producers in the country, meet the growing demand for fertilizer raw materials.
“This is in line with the government’s target to expand the Indonesia’s potential agriculture industry,” he said.
The tender for the factory’s construction would start in June, he said.
“We predict the construction will take 30 months. We expect this factory will begin operations by the end of 2012,” he said.