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7 February 2010

Indonesian firm asks for protection from Chinese imports

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Indonesia’s state fertiliser producer PT Pusri said the company will be able to withstand competition from Chinese companies in the domestic market as long the government maintains its current policy on raw materials, particularly gas, reported the Jakarta Post.

Pusri president director Dadang Kodri said the full implementation of the free trade agreement with China would not hurt the company for at least another three years as the government had already set the price of gas for the given period.

"What happens after the next three years is uncertain. If the government increases the price of raw material, Chinese products will dominate the domestic market because they have a stable price for raw materials," Dadang said.

The company is highly dependent on gas supply as it needed about 793 million standard cubic feet of gas per day (mmscfd) in 2010. The company is set to produce 7 million tons of urea fertilizer this year, 3 percent more than the 6.8 million tons produced in 2009.

"Our production capacity is 8 million tons annually. But PT Pupuk Iskandar Muda (PIM) is still being revitalised after a gas shortage," Dadang said, referring to the company's subsidiary.

Other subsidiaries include PT Petrokimia Gresik in Gresik, East Java, PT Pupuk Kujang in West Java, PT Pupuk Kaltim in East Kalimantan and PIM in Nangroe Aceh Darussalam.

Pusri is also optimistic its production of NPK fertiliser would grow by 70 percent to 2.2 million tons this year, up from 1.3 million tons in 2009.

Domestic fertiliser consumption currently stands at 1.4 million tons per year. The government predicts that in 2025, Indonesia will need about 23.2 million tons.


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