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Indonesian Industry Minister Agus Gumiwang Kartasasmita - ANT

Sojitz Corporation of Japan has expressed interest to develop the methanol and ammonia industry in Indonesia on account of a spike in demand for downstream industries in the nation, Industry Minister Agus Gumiwang Kartasasmita stated.

During a work visit to Japan, Kartasasmita, in the company of Indonesian Ambassador to Japan Heri Akhmadi, met with the chemical industry company’s CEO to discuss development of the methanol industry in Indonesia.

"During the meeting, Sojitz expressed interest in developing the methanol and ammonia industry in the Bintuni Bay Industrial Area that will involve an investment of some five billion dollars," the minister noted in a statement issued from Tokyo on Saturday.

The Indonesian minister notified the president and CEO of Sojitz Corporation Fujimoto Masayoshi that the Bintuni project will be included as a National Strategic Project (PSN), thereby making it eligible to attain facilities and various incentives from the government.“The petrochemical project in Bintuni Bay will be the largest, spanning an area of around two thousand hectares. We will discuss it further during our next visit in May," he remarked.

Sojitz Corporation's business in Indonesia includes the Kaltim Methanol Industry (KMI) in Bontang, East Kalimantan, which is the only methanol producer in Indonesia.

The company has an annual production capacity of 660 thousand metric tons.

"With domestic demand for methanol reaching around two million tons, the construction of a new methanol plant is direly needed," Kartasasmita pointed out.

Methanol raw materials are required in the textile, plastics, synthetic resin, pharmaceutical, insecticide, and plywood industries, among others. Methanol is also used as an antifreeze and inhibitor in oil and gas activities.

Furthermore, methanol is also one of the raw materials for manufacturing biodiesel."In 2020, the demand for methanol would also increase with the implementation of the mandatory biodiesel B30," he stated.

In order to realize the second methanol plant construction project, both governments must extend support to the development of the petrochemical industry in Bintuni, Kartasasmita stated.

Multi-year development of this industrial area is being conducted through a public-private partnership or PPP scheme.

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

On the occasion, Kartasasmita also invited Sojitz to invest in the soda ash industry as a downstream of ammonia and to lower CO2 emissions from coal combustion//ANT