Tuesday, 2nd September 2014

Inalum`s operations to be re-structured after 2013

Jumat, 18 Februari 2011 18:48 WIB | 2.143 Views
Jakarta  (ANTARA News) - The Indonesian government is to re-structure all operations of aluminum smelter PT Indonesian Asahan Aluminium (Inalum) in 2013 after the Japanese stake in the company have reverted to Indonesia, an industry official said.

"All of Inalum`s present operations will have to be re-structured after 2013. Therefore, we will set up a team for the purpose," said Agus Tjahajana, the Industry Ministry`s director general for international industry cooperation, here on Friday.

Tjahajana was speaking to the press on the sideline of a formal meeting between Indonesia and Japan on the continuation of the joint venture after the long-term cooperation contract expires in 2013. The Indonesian side has not yet finalized a study on the management concept of the company to be presented to the Japanese side.

He said the Indonesian government will devise a management concept by taking into account such things as the economic situation, the prevailing trend in the aluminium industry as well as the company operations` impact on the economy of the province. Inalum is based in Asahan, North Sumatera province.

"This is not a small thing so we need to be careful in this regard. The team is of the opinion that after 2013 and on, the position needs to be well planned. We have conveyed the idea to the Japanese side and if they want to come along, they can," said Tjahajana.

On the continuation of the handling of the PLTA II hydro-power plant, Tjahajana explained that the power plant is an integral part of the whole operation of Inalum, considering the fact that the smeltering process of aluminium needs a lot of low-cost energy that to date can only be supplied by PLTA II.

The Indonesian side in the meeting was represented by government officials from the Office of the Coordinating Minister for the Economy, Industry Ministry, Foreign Affairs Ministry, Finance Ministry and the Asahan Authority.

Sitting on the Japanese side were officials from the Ministry of International Trade and Industry (MITI), Nippon Asahan Aluminium Co.Ltd; Sumitomo Chemical and Japan International Cooperation Agency (JICA).

According to Tjahajana, in the first formal meeting on Inalum, both sides had just presented their positions and wishes on the cooperation continuation. "We refer (the Indonesian position) to what Mr. Hidayat, the Industry Minister, that Indonesia wants it to be discontinued, whereas they want it be continued," he said.

Besides conveying their wish for continuing the cooperation, Tjahajana said, the Japanese side has also made an offer of a fresh investment of 300 million US dollars aimed at boosting the production capacity up to 80,000 ton per year.

"That`s Japan`s offer for operations after 2013. We haven`t taken any move yet whether to accept it and just listening to them," said Tjahajana who emphasizing that what is on the table right now is the process of discontinuation of the joint venture of the company that produces 250,000 tons of aluminum per year.

Inalum`s production is 40 percent is for domestic market in Indonesia, which is just a 30 percent of the country`s annual demand for aluminium, and the rest 60 percent exported to Japan. PT Inalum represent a joint investment of 2.0 billion US dollars, consisting of a smelter and PLTA II Asahan hydro power plant.

Indonesia possesses 41.12 percent of the shares and 58.88 percent shares belongs to 12 Japanese investors.

PT Inalum was first planned in 1972 with the first production rolled out the factory`s stock yard in early 1982. (*)