Sriwijaya Fertilizer Builds New Factory In Palembang, Investment Value Reaches USD 670 Million

President Director of PT Pupuk Indonesia (Persero) (third left) Rahmad Pribadi. (Photo: Mery Handayani/VOI)

JAKARTA - PT Pupuk Sriwidjaja Palembang (Pusri) will build a new factory in Palembang, South Sumatra (Sumsel).

The Pusri-IIIB Development Project requires an investment of US$670 million or equivalent to Rp. 10.52 trillion (exchange rate of Rp. 15,702 per US dollar).

President Director of PT Pupuk Indonesia (Persero) Rahmad Pribadi said this new factory will be built using environmentally friendly technology.

According to him, the use of this technology can create energy efficiency and production costs, as well as increase factory productivity.

He said, this factory will replace the old factory.

The construction of the Pusri IIIB plant will begin in November 2023.

Still, said Rahmadn, construction work will be carried out by PT Adhi Karya (Persero) Tbk and Wuhuan Engineering Co. Ltd.

"Why Wuhuan? Wuhuan is one of the largest EPC companies for ammonia and urea in China, and has built the same factory, similar, although its capacity is different at one of our subsidiaries, namely Petrokimia Gresik," said Rahmad at the signing of the Funding Credit Agreement and Engineering Construction (EPC) for the Pusri IIIB Project at The Langham Hotel, South Jakarta, Friday, October 13.

The estimated investment value for the Pusri-IIIB project itself is IDR 10.5 trillion (including the owner cost) with a construction period of around 40 months.

This project is expected to be able to operate commercially by 2027.

The Pusri-IIIB Project funding is also carried out through a syndicated mechanism consisting of eight banks, namely state-owned banks, the private sector, and regional development banks (BPD).

The details are BNI, Bank Mandiri, Bank Central Asia (BCA), Bank Rakyat Indonesia (BRI), Bank Tabungan Negara (BTN), Bank Syariah Indonesia (BSI), Bank Jabar Banten (BJB), and Bank Sumsel Babel (BSB).

The total value of the Investment Credit (KI) disbursed is IDR 9.32 trillion.

Rahmad said the Pusri-IIIB factory would later be able to reduce emissions by up to 300,000 tons of CO2 per year.

The Pusri-IIIB plant has an ammonia production capacity of 445,500 tons per year and 907,500 tons urea fertilizer per year.

In terms of energy use, said Rahmad, the Pusri-IIIB Factory uses low energy technology with an energy consumption ratio for urea production of 22 MMBTU per ton and 32.89 MMBTU ammonia per ton.

"Currently, Pupuk Indonesia is ranked sixth as a fertilizer company in the world. With increased efficiency, we certainly hope to produce even better performance, including competing in regional and international markets," said Rahmad.

Meanwhile, the President Director of Pusri Palembang, Tri Wahyudi Saleh stated, the Pusri-IIB factory revitalization project will have a positive impact on the regional and national economy.

The reason is, this project will create jobs, increase regional income, and open up other economic opportunities.

The presence of this Pusri-IIIB factory is our commitment to maintain the availability of fertilizers in all areas of responsibility for distributing Pusri fertilizers. As well as our support in maintaining the sustainability of reliable and competitive industries to realize national food security," said Tri.