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Dahana needs $300m to build factory
State-owned explosives maker PT Dahana needs an investment of between US$250 million and $350 million to build a propellant factory in Subang, West Java, according to a statement made on Monday by president director F
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tate-owned explosives maker PT Dahana needs aninvestment of between US$250 million and $350 million to build a propellantfactory in Subang, West Java, according to a statement made on Monday bypresident director F. Harry Sampurno.
'We will use our own cash flow as well as obtain funds from our partners,' Harry said after signing a memorandum of understanding (MoU) with state-owned land system and weapons maker PT Pindad president director Sudirman Said in Bandung, West Java.
Harry said the large amount of money was needed for the factory to work at full capacity. The factory is to be built on a 600-hectare plot of land alongside offices, laboratories and warehouses.
Sudirman said that his company had agreed to buy propellant from Dahana for Pindad's ammunition, having previously imported its propellant.
Pindad's senior vice president for defense and security products, D. Bambang Muyono, said the company needed between 200 and 250 tons of propellant to produce small-caliber ammunition. Pindad needs a larger amount of propellant as it also produces large-caliber ammunition.
Bambang added that he expected Pindad would sell products made with domestic propellant at lower prices.
He said propellant constituted some 20 percent of production costs due to transportation and costly dangerous goods insurance.
