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tate-owned fertilizer producer PT Pupuk Kalimantan Timur (Pupuk Kaltim) will team up with major Jordanian mining firm Jordan Phosphate Mines Co. Plc. to build four plants worth US$300 million in Bontang, East Kalimantan.

Under a joint venture agreement inked on Wednesday, Pupuk Kaltim will control a majority share of 60 percent, while Jordan Phosphate will hold the remaining 40 percent.

Two of the plants, which are expected to begin construction in mid-year and be completed in three years, will produce 200,000 tons of phosphoric acid and 600,000 tons of sulfuric acid each year.

'€œThe phosphoric acid generated from [one of] the plants will be absorbed by Pupuk Kaltim and other subsidiaries of Pupuk Indonesia Holding Company to produce nitrogen, phosphorus and potassium [NPK] fertilizer,'€ Pupuk Kaltim corporate secretary Surya Madya said.

Jordan Phosphate, the world'€™s second-biggest phosphate rock exporter, will supply the raw material for processing with sulfuric acid, to create phosphoric acid '€” one of the main ingredients in fertilizer production currently imported.

The agreement also covers other projects, including the development of an aluminium fluoride plant with an annual production capacity of 12,600 tons and a gypsum granule plant that will have a production capacity of 500,000 tons.

The construction of these two projects will begin simultaneously with the former two.

The signing of the agreement was held during a Jordan-Indonesia Business Meeting and was witnessed by Investment Coordinating Board (BKPM) head Mahendra Siregar and visiting Jordanian Industry and Trade Minister Hatem Halawani, who came with a business delegation of dozens of firms led by King Abdullah II of Jordan.

Currently, Pupuk Kaltim'€™s annual outputs comprise 2.98 million tons of urea fertilizer, 1.85 million tons of ammonia fertilizer and 350,000 tons of NPK fertilizer.

Arifin Tasrif, president director of Pupuk Indonesia, Pupuk Kaltim'€™s holding company, said the collaboration would support Pupuk Indonesia'€™s long-term plan to build fertilizer industrial clusters in Java, Sumatra and Kalimantan, with each cluster consisting of phosphoric acid, sulfuric acid, urea, ammonium sulfate (ZA) and super-phosphate facilities.

Pupuk Kaltim'€™s new plants will help the holding company significantly increase its total output to 5.4 million tons of NPK fertilizer, from 3.1 million tons at present, according to Arifin.

Mohamad Bawazeer, chairman of the Middle East and Organization of Islamic Conference (OIC) at the Indonesian Chamber of Commerce and Industry (Kadin), said Indonesia aimed to attract more investment from Jordan and boost its exports to the Gulf country.

'€œIn the past decade, investments from Jordan have focused on the mining sector. We want to attract investment in other areas,'€ he said, adding that Indonesia also wanted to diversify its exports to Jordan, which currently relies heavily on Indonesia'€™s agricultural products, such as tea and coffee.

Two-way trade between Indonesia and Jordan settled at $438.6 million in the January-November period last year, down 3.65 percent from a year earlier, according to Indonesian trade statistics.

Jordan realized $232.9 million worth of investments in eight projects last year, according to
BKPM data.