SA explosives firm to open plant in Indonesia

South African explosives manufacturer African Explosives Limited has reached agreement with an Indonesian explosives company, PT Dahana, to start a joint venture (JV) to assemble shock tube units, in Subang, east of Jakarta, Engineering News Online reported Tuesday.

Initially, the facility will assemble about two-million shock tube units a year, ramping up to about five-million units a year at full production within three years.

The plant, which is a modular design, will be shipped to Indonesia in January 2008, and should be commissioned by the end of the first quarter of 2008.

"The new venture is at an advanced stage, an AEL team has been to Indonesia, and the feasibility study has been completed, the plant has been designed, and the contractual documents signed," said AEL executive director international business Vassie Ponsamy.

Components would be shipped from AEL's shock tube plant in Modderfontein, in Gauteng, for assembly at the new plant in Indonesia, and then the final product would be sold into the local market.

The company said that the market for shock tube in the region was about ten-million units a year, as Indonesia was a significant mining region, with large coal reserves.

Indonesian regulation did not allow for a foreign company to obtain a licence to assemble, manufacture and distribute explosives in the country, hence the need for a JV partner.(*)