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PETROGRES TO INVEST US$ 760 MILLION.   State fertilizer producer PT Petrokimia Gresik (Petrogres) will invest US$ 760 million by phases starting this year to expand its production capacity for urea and other fertilizers. PT Petrogres President Arifin Tasri said in May 2010 Petrogres is carrying out its plan in fuel conversion from oil to coal. The conversion plan will cost around US$60 million and. The conversion will save the company around Rp200 billion a year.  Petrogres also will build more tanks for ammonia to facilitate supply of the basic material for urea and NPK fertilizers, the production of which has continued to increase.  In line with the revitalization program planned by the government. Petrogres will build urea and ammonia plants to cost around US$500 million to be completed in 2011. The company, however, is still waiting for the guarantee from the government for gas supply. Petrogres also will build a phosphoric acid factory in joint venture with Jordan investors. Arifin   said this year the company hopes to increase fertilizer production to 4.2 million tons.   The increase in production is expected after expansion of its annual production capacity for NPK to 2 million tons from 1.3 million tons and ZA to 1 million tons from 800,000 tons, Arifin said.   The capacity expansion brought its total capacity to 4.2 million tons including urea fertilizer, he said.

CONSTRUCTION OF TWO STEEL FACTORIES IN S. KALIMANTAN TO BE SET EARLIER. The government wants  two steel factory projects in South Kalimantan with total investment of US$ 315 million to be fully implemented in 2012 earlier than previous schedule of 2014 . The two projects were planned by  PT Mandan Steel  and  PT Meratus Jaya Iron & Steel. Mandan Steel is owned by a Chinese steel maker China Nickel Resources Holding Co planning to build the upstream steel factory at a cost of US$ 250 million. Meratus is a joint venture between PT Krakatau Steel  and PT Aneka Tambang Tbk.planning to build one  at a cost of US$ 65 million. I Putu Suryawirawan, the metal director at the directorate general of metal, machine, textiles and multifarious industries, said Mandan Steel would start construction  in April 2010; Mandan Steel  will build a factory with an  annual production capacity of 500,000 tons in the first phase  producing special alloy.  Mandan Steel will make a contract for the procurement of basic material in the form of iron ore with PT Yiwan Mining and PT Sebuku Iron Lateritic Ore (Silo) in South Kalimantan. Mandan Steel will build the factory in three phases to be completed entirely in 2012  with a total investment of US$1 billion . In 2012, it will have a production capacity of 3 million tons .

BANK MANDIRI TO SPEND US$75 MILLION IN IT. State lender PT Bank Mandiri said it will invest US$ 75 million to improve its information technology infrastructure.  The spending is 25% higher than last years' US$ 60 year. Sasmita, the technology director of the country's largest bank in assets, said electronic transactions already made up 82% of its total transactions in 2009, up from 67% in 2008. The users of Internet Banking already reached 1.2 million persons by the end of last year up from 100,000 early that year. Bank Mandiri also plans to increase the number of its automatic teller machines (ATM) by 1,500 units  and Electronic Data Capture (EDC)  by 60,000 units to increase. By the end of 20`10, the number of its ATMs is expected to reach 6,000 units and  its EDC  to rise to 90,000 units.  Meanwhile,  the government said it will study options to increase the public shares in Bank Mandiri  that it would be entitled to tax incentives. A bank is entitled to tax incentive if at leats 40% of their share is held by the public.  Bank Mandiri is 32.6% owned by the public.

CHANDRA ASRI  AND TRI POLYTA EXPANDING CAPACITY. Indonesia's largest petrochemical company PT Chandra Asri  said it will start work  in its  US$ 2.27 billion investment  projects this year. Chandra Asri plans to build  short term projects and long term projects including  BTX extraction, butadiene and naphtha cracker  plants  and storage tank for liquefied petroleum gas (LPG)  and an oil refinery.  The naphtha cracker plant and the oil refinery to cost US$ 1 billion each  are long term projects, Chandra Asri President  Erwin Ciputra said. In the period of 2006-2009, Chandra Asri already invested US$ 160 million to finance debottlenecking  of polypropylene plant and construction of an ethylene pipeline and for the acquisition of  PT Styrindo Mono Indonesia, a  producer of styrene monomer.  Meanwhile, associated company PT Tri Polyta Indonesia has started  work to build  a new production facility  valued at Rp300 billion (US$32.5 million).     Tri Polyta will expand its annual production capacity for polypropylene  (PP) from 360,000 tons at present to 480,000 tons, its President Iman Sucipto Umar said.  The new facility of the company which has a 40% share of PP market in the country, is expected to  be operational in the first quarter of 2011, Iman said.   Iman said the  expansion project is to meet  growing demand expected to reach  1.1 million tons in  2012. Currently, the country's production of PP  averages 650,000 tons  a year falling short of requirement  of 850,000 tons.

PERTAMINA EYEING ASSETS OF  CONOCOPHILIPS. State oil and gas company PT Pertamina  said it is ready to take over all assets of ConocoPhilips in the country.  ConocoPhilips , based  in Houston,  Texas, the United States, has announced plan to sell its entire assets  abroad. The total assets of ConocoPhilips in Indonesia are  estimated to be worth US$ 600million-US$ 700 million.      Pertamina Vice President Bayu Kristanto said Pertamina has set aside fund for the take over of the oil and gas related assets.  Raden Priyono, the head of the oil and gas regulator BP Migas , said  Conoco/Philips'  produces 265  MMscfd  and 20,000 barrels of crude oil per day  from the North Belut gas field in   Block B  in  South Natuna Sea.  Meanwhile, French oil and gas company. Total SA said it has been in  serious talks with ConocoPhilips  on plan to acquire  ConocoPhilips stake in the Warim Block  in Papua.  Total Exploration and Production  President Yves-Louis Darricarrere said  Total  wants to expand its operation to eastern part of the country. Darricarrere said the process of business agreement is expected to be completed this year.

MONTHLY REPORT
INDONESIAN COMMERCIAL NEWSLETTER (ICN)
 
CORPORATE NEWS IN BRIEF
January 2010
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