ASEAN KEY DESTINATIONS
Malaysian company invests in Indo terminal
Malaysian construction company MTD Group plans to spend $50 million to increase the coal shipment capacity of a recently opened seaport terminal in western Indonesia.
The terminal, located at Cigading port in Cilegon, Banten province, was inaugurated on Tuesday. Currently, it can accommodate up to 6 million tons of coal shipments per year.
MTD’s investment is expected to increase the terminal’s capacity to 18 million tons, MTD president Dato Azmil Khalid said on Tuesday. The terminal is operated by MTD’s subsidiary Cigading International Bulk Terminal.
“As one of the biggest coal producers in the world, Indonesia must have proper coal shipment facilities that can meet the needs of domestic and international clients,” Dato said.
The terminal has a storage capacity of up to 450,000 tons and is equipped with cranes, conveyor belts and storage areas. Additionally, it can accommodate vessels carrying up to 110,000 deadweight tons.
Dato expressed optimism that demand for coal-handling services at the terminal will grow because the closest coal terminal at Tanjung Priok, Indonesia’s largest, is nearing capacity.
“It’s only logical that companies will now consider using our terminal,” he said.
Dato explained that the next phase of expansion will involve spending $25 million to double the terminal’s current annual capacity.
An additional US$25 million will eventually boost it by another 6 million tons, bringing its total annual capacity to 18 million tons.
Dato said that during the next eight years, the company will focus on increasing profits and making CIBT a critical coal terminal operator in Indonesia.
Cilegon is home to multiple petrochemical companies. Among them is Indonesia’s largest, Chandra Asri, which is owned by tycoon Prajogo Pangestu.
These companies need large supplies of energy, including coal, to fuel power plants that provide electricity for their operations.
According to CIBT’s Web site, the terminal is expected to handle coal shipments mostly from Sumatra.
Sinomast Metacorp Labuan, which is indirectly owned by MTD, owns 95 percent of CIBT. Krakatau Bandar Samudera, a subsidiary of Indonesia’s state-controlled steel maker Krakatau Steel, owns the remaining 5 percent.
According to the “build, own, transfer” scheme in the contract, Krakatau Bandar will own CIBT after 32 years.
Krakatau Steel needs coal to help support the operations of its $6 billion Krakatau Posco joint venture with South Korean company Posco.
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