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Pupuk Kaltim Is Ready To Build Its First Soda Ash Factory To Reduce Import Dependence

In early 2025, PT Pupuk Kalimantan Timur (Pupuk Kaltim) will begin constructing Indonesia's first soda ash factory. This initiative marks a significant step towards achieving national industrial independence. The important phase will kick off with the signing of the Engineering, Procurement and Construction (EPC) contract, set to take place in Jakarta on Wednesday, January 22, 2025.

"Pupuk Kaltim is now entering a crucial stage in building the first soda ash factory in Indonesia, aimed at strengthening the domestic industry. This project aligns with the government's efforts to promote sustainability through strategic initiatives," said Pupuk Kaltim's Corporate Secretary, Teguh Ismartono, during a media briefing on the EPC contract signing for the soda ash factory on Monday, January 20, 2025.

The factory will be built on a 16-hectare site in the PT Kaltim Industrial Estate in Bontang, East Kalimantan, as part of the government's downstream strategy.

According to BPS data, Indonesia imported 916,828 metric tons of soda ash for domestic use in 2022. This demand is expected to rise to 1.2 million metric tons by 2030. With a production capacity of up to 300,000 metric tons per year, the factory is projected to meet about 30% of the domestic soda ash needs.

Soda ash is a key raw material for several industries, including glass, ceramics, textiles, paper, and batteries, which have relied entirely on imports. The growing demand is one of the main reasons for Pupuk Kaltim's decision to build the soda ash factory.

"The construction of the soda ash factory is a strategic move to reduce dependence on imports, allowing the domestic industry to become more self-sufficient."

We are confident that this factory will help maintain supply stability, improve operational cost efficiency in the industry, and strengthen Indonesia's competitiveness in the global market by optimally utilizing local resources, said Teguh.

Teguh also highlighted that this development aligns with Pupuk Kaltim's efforts to add value to the national economy, especially in the downstream sector, which is a government focus.

Additionally, the Project Preparation Team Leader for Soda Ash, Rifki Adi Nugroho, mentioned that the production process of the factory will implement circular economy principles and be environmentally friendly. He noted that soda ash is produced from ammonia and carbon dioxide (CO2), which are main products and by-products from other production units at Pupuk Kaltim.

By utilizing CO2, the soda ash factory is expected to absorb up to 170,000 tons of CO2 annually. Conversely, the by-product of the soda ash factory, Ammonium Chloride, can also serve as a nitrogen source for domestic and export fertilizer production.

"The construction of the soda ash factory is a diversification effort by Pupuk Kaltim aimed at adding value to environmentally friendly products. We believe this factory will have a positive impact not only on the economy but also on the environment and society," he stated.

The construction of the Pupuk Kaltim soda ash factory is targeted for completion by the end of 2027, prioritizing Environmental, Social, and Governance (ESG) principles. This commitment is demonstrated by starting construction only after obtaining the Environmental Impact Analysis (AMDAL) document.

Moreover, the soda ash factory is expected to create 800 jobs at the peak of construction, focusing on hiring local workers in accordance with applicable regulations.

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Tag: Pupuk Kaltim