ID :
18512
Tue, 09/09/2008 - 02:07
Auther :
Shortlink :
https://www.oananews.org//node/18512
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GOVT TO REVITALIZE FERTILIZER PRODUCERS
Jakarta, Sept 8 (ANTARA) - The government plans to revitalize fertilizer companies for secured supplies.
Industry minister Fahmi Idris, after a limited cabinet meeting on fertilizers and rice seeds at the presidential office here on Monday, hoped the revitalization of eight fertilizer companies would be started in the second semester this year and scheduled for next could be completed in 2011.
He said the plan was aimed at securing national food supply which had often been disrupted due to unstable fertilizer supplies.
"One of the problems creating an obstacle to secured supplies is that many of our fertelizer plants are above 20 years old and therefore inefficient as often seen in their gas consumption," he said.
He said fertilizer plants that produce urea use natural gas as a source of energy and as raw material. The plants that are inefficient use gas between 30 and 36 MMBTU while those which are efficient only use 24 MMBTU per ton.
"We told in the meeting just now that the need for urea in 2010 will be 14.75 million tons while SP 7.64 million tons, ZA 3.11 million tons and MPK 6.59 million tons. Our plants have so far been designed to have a capacity of only 8.7 million tons," he said.
He said the revitalization of the eight urea companies would cost Rp45.81 trillion while revitalization of the MPK plant would need around Rp3.21 trillion so totally Rp49.01 trillion would be needed for the effort.
He said the fund for the program was expected to come from the companies and banks.
He said the fertilizer companies may have an equity fund of Rp5.12 trillion if they pay devidends every year but "if they do not pay devidends their equity fund could reach Rp7.62 trillion" and therefore there would be a shortage of around Rp42 trillion which was expected to be covered with bank credits.
In view of that he said he hoped there would be relaxation in the maximum limit of credit distribrution.
According to him banks would seek assurance with regard to gas supply for the industry for the next 20 years' time. "If the condition is met banks would be willing to extend credits," he said.
Trade minister Mari Elka Pangestu meanwhile said the meeting also discussed efforts to prevent fertilizer shortage through various monitoring efforts by the trade ministry.
Regarding supervision of procurement and distribution of subsidized fertilizers she said "in principle the system to be used is the one already being used so far namely from producers to distributors, retailers and farmers. We have a system with orderly stages and here the responsibility is in the hands of producers. Producers are responsible for the distribution to distributors."
She said there had been a team of monitoring in the regions with members from offices concerned. She said a memorandum of understanding had also been signed with the national police chief to improve control. She admitted there were still problems that often disrupted subsidized fertilizer supply that hurt farmers.
In view of that she said the government planned to improve the system of transportation used from distributors to distributors and to retailers and farmers so that in case there were irregularities control could be taken.
She said retailers at the lowest level were also required to register businesses and farmer groups that bought fertilizers from them. "The registration is expeted to be completed in December this year," she said.
Industry minister Fahmi Idris, after a limited cabinet meeting on fertilizers and rice seeds at the presidential office here on Monday, hoped the revitalization of eight fertilizer companies would be started in the second semester this year and scheduled for next could be completed in 2011.
He said the plan was aimed at securing national food supply which had often been disrupted due to unstable fertilizer supplies.
"One of the problems creating an obstacle to secured supplies is that many of our fertelizer plants are above 20 years old and therefore inefficient as often seen in their gas consumption," he said.
He said fertilizer plants that produce urea use natural gas as a source of energy and as raw material. The plants that are inefficient use gas between 30 and 36 MMBTU while those which are efficient only use 24 MMBTU per ton.
"We told in the meeting just now that the need for urea in 2010 will be 14.75 million tons while SP 7.64 million tons, ZA 3.11 million tons and MPK 6.59 million tons. Our plants have so far been designed to have a capacity of only 8.7 million tons," he said.
He said the revitalization of the eight urea companies would cost Rp45.81 trillion while revitalization of the MPK plant would need around Rp3.21 trillion so totally Rp49.01 trillion would be needed for the effort.
He said the fund for the program was expected to come from the companies and banks.
He said the fertilizer companies may have an equity fund of Rp5.12 trillion if they pay devidends every year but "if they do not pay devidends their equity fund could reach Rp7.62 trillion" and therefore there would be a shortage of around Rp42 trillion which was expected to be covered with bank credits.
In view of that he said he hoped there would be relaxation in the maximum limit of credit distribrution.
According to him banks would seek assurance with regard to gas supply for the industry for the next 20 years' time. "If the condition is met banks would be willing to extend credits," he said.
Trade minister Mari Elka Pangestu meanwhile said the meeting also discussed efforts to prevent fertilizer shortage through various monitoring efforts by the trade ministry.
Regarding supervision of procurement and distribution of subsidized fertilizers she said "in principle the system to be used is the one already being used so far namely from producers to distributors, retailers and farmers. We have a system with orderly stages and here the responsibility is in the hands of producers. Producers are responsible for the distribution to distributors."
She said there had been a team of monitoring in the regions with members from offices concerned. She said a memorandum of understanding had also been signed with the national police chief to improve control. She admitted there were still problems that often disrupted subsidized fertilizer supply that hurt farmers.
In view of that she said the government planned to improve the system of transportation used from distributors to distributors and to retailers and farmers so that in case there were irregularities control could be taken.
She said retailers at the lowest level were also required to register businesses and farmer groups that bought fertilizers from them. "The registration is expeted to be completed in December this year," she said.
