Sojitz Builds The Largest Methanol Factory In Indonesia With IDR 71 Trillion

Sojitz illustration (Photo: Special)

JAKARTA - The chemical industry company Sojitz Corporation said that it would soon build the largest methanol production facility in Indonesia, worth US $ 5 billion, or the equivalent of IDR71.9 trillion (exchange rate IDR14,391).

This commitment was conveyed by the Minister of Industry (Menperin) Agus Gumiwang Kartasasmita when visiting Sojitz representatives in Japan this middle of the week.

"During the meeting Sojitz expressed his interest in developing the methanol and ammonia industry in the Bintuni Bay Industrial Area," he said in a press statement Saturday, March 13.

The Minister of Industry added that he exclusively held a meeting with the President and CEO of Sojitz Corporation, Mr. Fujimoto Masayoshi. It was stated that the Bintuni project was included as a National Strategic Project (PSN), so it would get facilities and various incentives from the Government.

“The petrochemical project in Bintuni Bay will be the largest with an area of around 2,000 hectares. We will discuss it further on our next visit in May, "he explained.

For information, Sojitz Corporation's business in Indonesia includes the Kaltim Methanol Industri (KMI) in Bontang, East Kalimantan, which is the only methanol producer in Indonesia. The company has a production capacity of 660,000 metric tons per year.

"With domestic demand for methanol reaching around two million tons, the construction of a new methanol plant is urgently needed," he said.

Furthermore, the raw material for methanol is urgently needed, including in the textile, plastics, synthetic resins, pharmaceuticals, insecticides, plywood industries.

Methanol also acts as an antifreeze and inhibitor in oil and gas activities. In addition, methanol is also one of the raw materials for making biodiesel.

"In 2020, the demand for methanol will also increase with the implementation of the mandatory biodiesel B30," he said.

In order to realize the second methanol plant construction project, the full support of the two governments is needed in developing the petrochemical industry in Bintuni. This industrial area is developed in a multiyear manner using PPP (Business Entity Government Cooperation).

Infrastructure development in the area is targeted to be implemented this year and continued with the construction of factories in 2022, so that tenants can start producing in 2024.

On this occasion, the Minister of Industry also invited Sojitz to invest in the soda ash industry as a downstream of ammonia, as well as a reduction in CO2 emissions from coal combustion which Sojitz will develop.

"The government will provide certain incentives for pioneer industries such as soda ash," concluded the Minister of Industry.