JAKARTA (TheInsiderStories) – Nindya Karya, state-owned construction firm signed and agreement with South Korea’ DH Group to build refinery in Dumai and Rokan Block owned by PT Pertamina. The company also inked an agreement with Samsung Engineering to develop water treatment facilities in Bali and Yogyakarta.
Total cost for the two projects worth of Rp65.20 trillion (US$4.66 billion). The signing took place on South Korea on Dec. 12 witnessed by chairman of Investment Coordinating Board Bahlil Lahadalia.
He said, both projects its expecting could help the government to lift up the oil capacity of Rokan Block and Dumai and to reduce fuel import.
Pertamina has said will allocate at least $3.7 billion to develop its upstream sector next year, from the total 2020 budget of $7.8 billion. It includes in the form of exploration and development of work areas managed by the state-owned energy producer.
“Starting next year, 60 percent of capital expenditure is for developing upstream assets that we manage,” Pertamina’ CEO Nicke Widyawati said on Nov. 26.
For next year, she said the company will drill 122 development wells and two exploration wells in Tunu and Peciko Field. The company is in the process of procuring a rig for the well drilling activity.
In addition to the upstream sector, said Widyawati, Pertamina will also pour investment funds next year for the construction of a refinery of around $1.5 billion. Especially for the refinery project that is already running in Balikpapan and preparation for the Tuban Refinery project.
Recently, Indonesian government attracted many South Korea companies to Indonesia. The companies included Pohang Iron amd Steel Company (POSCO), Hyundai Motor Corp., LG Group, SK Global, Samsung Electronics, Samtan Gas, and Cheil Jedang.
POSCO was reported to invest in Indonesia worth of $4 billion to help the country’ intention to produce 10 million tons of steel through PT Krakatau Posco, a joint venture company with PT Krakatau Steel Tbk (IDX: KRAS) in Cilegon, West Java. The JV company was expected to realize in 2025.
Posco wanted to develop products into hot rolled coils (HRC) and cold rolled coil (CRC) in the new plant. Starting next year, the manufacturer plans to market 750,000 tons of HRC steel products, while CRC products were in talk with its local partner.
While, during his visit to South Korea, industry minister Agus Gumiwang, said that LG Chemical expressed its interest to build an integrated battery factory in Indonesia, included a cell battery factory, battery modules and battery recycling facilities. At the meeting, he revealed the chemical producer was committed to invest around $2.3 billion and chose Surabaya as the testing area.
While, SK Group was enthusiastic about investing in the industrial sector, so it could develop the petrochemical industry in Indonesia to reduce import. Nearly six million tons of petrochemical raw material are absorbed by the domestic market, while the supply of domestic production is only able to meet 2 million tons, he adds.
While, Hyundai Motor Co., is expected to invest around $1 billion for the electric vehicle (EV) project located on 600 hectares land in Karawang, West Java. Initially the car manufacturer will invest around $269 million.
Other companies has invested in the country are E1 Corp joined with local gas producer PT Pertagas. Then, Samsung Electronics invested $146 billion in Bekasi, West Java and Samtan Gas joint with PT Pertamina invests $135 billion on gas processing located in South Sumatra.
Furthermore, Krakatau Posco Power invested $123 billion in the power generation industry in Cilegon, Banten while Win Textile buried funds worth of $77 billion to work on the textile industry in Purwakarta, West Java. Also, LG Electronics spent $60 billion in Bekasi, West Java and Tangerang, Banten and Cheil Jedang built chemical plant with costs of $57 billion in Pasuruan, East Java.
Beside these ten major companies, there are hundreds of other Korean companies in Indonesia. Those companies run industries in various fields ranging from minerals, textiles, telecommunications, machinery, automotive, electronics and others.
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