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Indonesia : $1.5b to be spend by AKR on 2 New Power Plants.

A top executive at the company said that Fuel and chemical Distribution Company AKR Corporindo intends to construct power plants with a capacity of up to 1,200 megawatts at its industrial estate in Gresik, East Java, which will cost a total investment of between $1 billion and $1.5 billion.

AKR president director Haryanto Adikoesoemo, declared construction will start next year to support the Gresik industrial estate called Java Integrated Industrial and Ports Estate (JIIPE), which the company partially owns.

The project will include one coal-fired and one gas-fired power plant, both of which will come with two turbines that each has a capacity of 300MW.

JIIPE is a 1,700-hectare industrial and port estate that is still being developed and will cost a total of $520 Million.

Construction is planned to reach conclusion in 2020-2022. The first phase of development, which covers an area of 870 hectares, started earlier this year.

Haryanto, who is ranked 28th on Globe Asia s list of the 150 richest Indonesians with an estimated net worth of $1.3 billion, said the plants will get its fuel supply from Kalimantan.

He explained, Gresik is located close to South and East Kalimantan .

Haryanto said AKR is aiming to book a 10 percent increase in revenue and net income next year, when the first phase of the industrial estate is expected to be completed. The area will then be sold to companies seeking to build factories or manufacturing plants.

AKR is aiming to book up to Rp 27 trillion ($2.2 billion) worth of income by the end of 2014 or an 8 percent increase from previous year s revenue of Rp 23.3 trillion.

The company for its main business of fuel and chemical distribution intends to reserve up to $35 million in capital expenditure next year, which will be spent on new fuel stations in 50 to 60 locations.

In 2013, AKR was given 267,892 kiloliters of subsidized fuel to distribute, with an extra reserve allocation of 612,958 kiloliters in the middle of the same year by Indonesia s downstream oil and gas regulator, BPH Migas.

It was selected in December 2013 to distribute an added 640,000 kiloliters of subsidized fuel all through 2014.

Of the $35 million capex, between $20 and $25 million will be used to build fuel stations, whereas the remainder is to be spent for expansion of its fuel terminal and maintenance of its fuel transportation vessels.

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Publication:Mena Report
Date:Dec 1, 2014
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