German industrial giant Ferrostaal plans to invest $2 billion into building downstream petrochemical facilities in West Papua, the Industry Ministry said in a statement late on Monday. The statement revealed that President Susilo Bambang Yudhoyono met with Klaus Lesker, a Ferrostaal executive, during the head of state’s visit to Germany, which concluded on Tuesday.
Indonesian officials — including Industry Minister M.S. Hidayat and the ministry’s director general, Panggah Susanto, as well as the chairman of the Investment Coordinating Board (BKPM) Chatib Basri — signed a letter of intent with Lesker regarding the project. The project, which involves the construction of plants and supporting facilities to produce methanol propylene and polypropylene from natural gas, is expected to be completed in 2019.
“It needs a total investment of around $2 billion,” the statement said. The Indonesian government has agreed to allocate domestically produced gas to the Ferrostaal plants, the statement said. Lesker was cited in the statement as saying that Indonesia could reduce petrochemical imports by up to $600 million when the facilities are fully operational. He added that the project would involve the transfer of high-technology and significant job creation.
“It will open up jobs for around 3,000 people, whether directly or indirectly,” Lesker said. Once the facilities are complete, they will be able to produce 400,000 tons of polypropylene per year. They will also produce synthetic materials and some gasoline and liquid gas, which will be sold domestically. Polypropylene and polyethylene are raw material for synthetic products, primarily in the plastics industry. They are also used in the automotive, pharmaceutical and furniture industries.
The ministry said the project would be included in the government’s economic master plan, known as MP3EI, which aims to spread the benefits of development across the country. Meanwhile, Tourism and Creative Economy Minister Mari Elka Pangestu, who accompanied Yudhoyono to Berlin, attended the signing of a joint venture agreement between Indonesian tourism logistics company Panorama Group and hotel chain Carlson Rezidor.
Under the agreement, the companies will seek to initiate hotel projects under the Carlson Rezidor brand in Indonesia. The value of the deal was not disclosed. Germany is Indonesia’s biggest trading partner in Europe. Indonesian exports to German last year totaled $2.59 billion, while Germany’s exports to Indonesia stood at $3.3 billion. Realized investment from Germany to Indonesia last year stood at $75.8 million. In Berlin, Yudhoyono also met with the chief executives of carmaker Volkswagen and electronics giant Siemens. The president has since left for Hungary.
source : the jakarta globe
source : the jakarta globe
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