SURYA HOPES TO EARN $230 MILLION A YEAR FROM AMMONIA PLANT

Jakarta, 12 Dzulqa’dah 1435/7 September 2014 (MINA) – Publicly listed gas refiner Surya Esa Perkasa expected to pocket up to US$230 million in revenue during the first year of operation of the company’s new ammonia plant, which is now under construction in Central Sulawesi, the company’s executive said Friday.

The plant — located in Luwuk, Central Sulawesi — would start commercial production by the end of 2016 with plans to produce 595,000 metric tons of ammonia during its first year, or 85 percent of its installed capacity of 700,000 metric tons per annum, according to the company’s corporate secretary and investor relations head, Kanishk Laroya.

Laroya said the plant — which will be run by Surya Esa’s subsidiary, Panca Amara Utama (PAU) — would be the largest ammonia producer in the country. The company expects to cash between $220 million and $230 million in total revenue during the first year of its operation, The Jakarta Post quoted by Mi’raj Islamic News Agency (MINA) as reporting.

Surya Esa’s subsidiary builds ammonia plant in Luwuk, C. Sulawesi
Plant to produce 595,000 tons in the first year of its operation
The installed capacity will reach 700,000 tons per annum

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“The plant is designed to operate at full capacity after three years, and is estimated to bring in around $270 million of total revenue once it is running at maximum capacity,” Laroya explained.

The plant, which according to the company’s documentation has the potential to earn $3.2 billion in 12 years, marked its ground-breaking ceremony earlier this year.

The total investment needed for the plant, which will produce raw materials for a wide range of products from fertilizers to cleaners, is expected to be around $799 million.

The International Finance Corporation (IFC) — the World Bank’s private-sector financing arm — agreed Friday to provide a syndicated loan of $509.9 million to partly finance the construction of the ammonia plant.

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The loan syndication involves seven international lenders including several international banks, namely Australia’s ANZ Bank; the HSBC; the Korea Development Bank; Singapore’s OCBC; Japan’s Sumitomo Mitsui Banking Corp.; Standard Chartered, and Singapore’s UOB.

The loan is said to be the IFC’s biggest-ever investment in Indonesia, and its largest loan to be channeled to the Asia-Pacific region in the last decade.

IFC’s Indonesia country manager, Sarvesh Suri, said the institution was eager to invest in the new plant given the scale of investment and its location in the eastern half of Indonesia, which would be beneficial in enticing more investors to the country’s eastern regions.

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The new ammonia plant is expected to reduce the country’s ammonia imports, which total around 200,000 tons a year, meeting half its annual needs of 400,000 tons.

Among the steps taken by Surya Esa to further the plant’s development was a sales purchase agreement, signed in 2013 by the company together with Pertamina Medco Sulawesi, to supply the plant with 55 million standard cubic feet per day (mmdcfd) of gas through December 2027.

It has also signed an engineering and procurement contract (EPC) with Inti Karya Persada Teknik and the Japan-based Toyo Engineering Corporation to construct the plant and provide support facilities.(T/P009/P3)

Mi’raj Islamic News Agency (MINA)