Bosowa operates facilities worth Rp 1.59t in E. Java

A Makassar-based diversified conglomerate, the Bosowa Corporation, has started operation of two new facilities in Banyuwangi, East Java, built with a Rp 1.59 trillion (US$118.2 million) investment as part of its expansion strategy this year, The Jakarta Post reported on Saturday

The facilities, namely a cement grinding plant worth Rp 800 billion and a liquefied petroleum gas (LPG) terminal worth Rp 787 billion, are set to tighten Bosowa?s grip on both the cement and energy industries in the surrounding regions, the paper said.

?The facilities aim to strengthen distribution and the existence of LPG and cement [businesses] on Java and Bali in order to lower logistics costs,? chief executive officer Erwin Aksa told The Post in a text message on Friday.

The new grinding plant will be able to produce 1.8 million tons of cement each year, adding to 5.4 million tons of cement Bosowa currently makes at its two plants in South Sulawesi and Riau Islands.

The terminal is designed to annually produce 10,000 metric tons (MT) of LPG.

Erwin also said in a statement that on the 9-hectare plot of land where the new LPG terminal was located, Bosowa planned to build a number of additional facilities, including a dock with a capacity of 6,500 deadweight tonnage (DWT) and four LPG tanks with a capacity of 2,500 MT each, in the near future.

Industry Minister Airlangga Hartarto, who witnessed the official kick-off of the facilities by Vice President Jusuf Kalla on Thursday, said that at present the growth of cement consumption was shifting to regions outside of Java Island and the eastern part of the archipelago.

?This move [the operation of a new cement plant] is in line with the government?s plan to improve and expedite infrastructure development and boost industrial activities across Indonesia,? Airlangga said.

Domestic cement sales, an indicator of consumption in Southeast Asia?s biggest economy, amounted to 60 million tons in 2015 and the figure is expected to surge by 5 percent this year, according to the Indonesia Cement Association (ASI).

However, from January to September sales only reached 44.71 million tons, up 2.95 percent from the past year, because of lower demand from the property sector.

Meanwhile, LPG consumption nationwide will be 7 million MT this year, up 11.11 percent from 6.3 million MT last year, 64.8 percent of which was derived from imports, according to an estimate from state owned oil and gas giant Pertamina.

Airlangga expected that Bosowa?s gas facility would help meet demand for LPG in East Java, Bali, and surrounding areas, as well as strengthen the distribution chain of LPG by Pertamina to serve regions in eastern parts of the country.

?The effort will support the government?s plan to shift from kerosene to gas that started in 2007,? Airlangga said. ?In addition to meeting household needs, LPG can also function as fuel or industry raw material. Therefore the potential for its use in the future will be relatively big.? (*)