PLN inks US$649m power deal with Hankook Tire of Korea
Friday, July 29 2011 - 02:17 AM WIB
The deal, valued at Rp 5.5 trillion (US$643.5 million) was signed by PLN President Director Dahlan Iskan and Hankook Tire Indonesia President Director Lee Ho-gun in Jakarta.
?The electricity purchase agreement shows foreign investors? trust in PLN?s ability to provide electricity for factory development in Indonesia with a level of service that suits their requirements,? Dahlan said after the signing.
He explained that the electricity to Hankook?s factory would be supplied in two phases. In the first phase, starting in March 2012, PLN would channel 30 MVA, while the remaining 30 MVA would be delivered starting August 2015, he added.
Hankook will receive the company?s premium service with quality standards agreed on by the two sides. Under the agreement, PLN will compensate Hankook if there is a shutdown.
PLN sells electricity to Hankook at Rp 745 per kilowatt-hour (kwh), while other industrial customers pay Rp 605 per kwh.
To meet Hankook?s standards, PLN said it would expand its current installations and closely maintain its main electricity networks and its supporting facilities. The investment needed to supply electricity to Hankook was around Rp 200 billion to build the necessary infrastructure, the head of PLN?s sales division, Benny Marbun, said. Hankook would cover 80 percent of the investment and PLN would cover the other 20 percent.
Hankook is currently building a production plant in Bekasi with an initial investment of $353 million. The plant, which is scheduled for commercial operation in 2014, will have a total production capacity of 6 million tires a year.
The $353 million production facility is the first phase of the company?s planned $1.1 billion investment in Indonesia through 2018.
The Investment Coordinating Board (BKPM) estimates that Hankook?s investment would create around 1,400 new jobs by 2014 and 4,200 by 2017.
Currently, the firm is the world?s seventh-largest tire producer.
PLN also provides its Platinum service to industrial customers for Rp 810 per kwh. This service guarantees that there will be no shutdowns in electricity.
As of today, 27 companies have used or will soon use the Premium and Platinum services.
PLN business and risk management director Murtaqi Syamsudin said cement producer PT Semen Gresik was one of the Platinum service subscribers for its factory in Tuban, East Java, with a total capacity of 60 MVA.
?Holcim will also use the service starting in March 2012, with a total capacity of 45 MVA, while Krakatau Steel-Posco will use it starting in March 2013 with a capacity of 150 MVA,? he said.
The 2010 ministerial decree on electricity tariffs allows PLN to provide special services to industrial customers through business-to-business arrangements.(godang/giok/josef)