Pupuk Indonesia to raise Rp10 trillion funds from bond market

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Photo Pupuk

JAKARTA (TheInsiderStories) – State-owned fertilizer producer PT Pupuk Indonesia Holding Company (PIHC) plans to issue local bonds worth Rp10 trillion (735.29 million) in the first quarter of 2017 for debt refinancing and revitalize two plants. The demand of fertilizer is estimated to reach 9.55 million ton this year.

The company has earned a rating of ‘AAA’ by Fitch Ratings and now seeks another rating from PEFINDO and Standard & Poor’s.

“We will use the funds for debt refinancing and revitalize our fertilizer plants — Kaltim 5 (East Kalimantan) and Pusri II (South Sumatera,” said Finance Director Indarto Pamoengkas on Tuesday.

He added, Kaltim V needs investment of $590 million and Pusri II $580 million. In addition, the two projects, Pupuk Indonesia also has a plan to develop Amorea 2 plant in East Java with total investment of $500 million.

The construction of Pusri II B plant is expected to be completed and have already started production this year. He stressed that the revitalizing and construction of the plants are targeted to be completed by 2017.

Currently, Pupuk Indonesia  has production capacity of 14 million tons per annum and expects to reach 19 million tons per year by 2017. The company prepares multi-years investment up to Rp13 trillion to lift up the production capacity.

Recently, Pupuk Indonesia and state owned energy producer PT Pertamina have agreed to set up a joint venture company (JVC) to build petrochemical plant in Indonesia. The new JVC has been established and will start operating this year.

Both companies are planning to build at least three projects, namely Methanol plant in Bunyu Island in East Kalimantan, fertilizer gas plant in Bintuni Bay, West Papua and in Cepu Block in East Java.

To build a petrochemical plant from upstream to downstream requires investment of around $1 billion.

This year, the company targets to book net profit and revenues Rp5 trillion and Rp80 trillion respectively from last year the net profit of Rp3.3 trillion and revenues at Rp66 trillion. (*)

The post Pupuk Indonesia to raise Rp10 trillion funds from bond market appeared first on The Insider Stories.

Source: The Insiderstories
Pupuk Indonesia to raise Rp10 trillion funds from bond market

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