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etroleum and chemical distributor PT AKR Corporindo will disburse another multimillion dollar investment for the Java Integrated Industrial and Port Estate (JIIPE), a joint venture between the firm and state-owned port operator Pelabuhan Indonesia (Pelindo III), in Gresik, East Java.

AKR Corporindo director Koko Matthew said recently that within the next three years his company would allocate another Rp 4 trillion (US$294.32 million) for the project to build access to the industrial estate.

'€œThe funds will be sourced by bank financing,'€ he said, adding that several domestic lenders, including state-owned Bank Mandiri, would likely form a consortium to fund the project.

The funds would be used to build toll roads and double-track railways, hoping to lure more prospective tenants sitting in the area.

Koko said that besides providing access, his firm would also allocate funds to build the industrial estate. However, it would focus fund disbursement to develop areas that had secured tenants.

Seven companies in the consumer goods, manufacturing and food and beverage businesses had inked deals to operate in the JIIPE.

The companies hailed from overseas, such as Japan, South Korea and Germany. Three of the seven companies had started construction while 12 to 14 more companies were still in negotiations, Koko stated.

JIIPE is an integrated industrial estate that will consist of an industrial area, a port and other supporting facilities, such as a power plant, a water treatment plant, as well as toll road and railroad connections.

It will also have a logistics warehouse to cater to the estate'€™s manufacturing, consumer goods and food and beverage industries with raw materials, such as wheat, soybeans and milled soybeans.

The company aims for logistics facility construction to commence in 2018 and be completed by 2023. AKR Corporindo projected that the 2,930-hectare project establishment, which consisted of 1,760 hectares of industrial area, 765 hectares of residential and 406 hectares of port, would cost around $2 billion to complete.

The first phase of the JIIPE construction, about 800 hectares of the industrial area, started in 2013 and cost Rp 4 trillion in investment until the end of this year.

Most of the funds were allocated for building a port and opening access from the main road to the port. The estate'€™s first port had been built and awaiting permits from the port master (KSOP) before commencing operations, Koko said.

'€œProject funding was shared equally between us and Pelindo III. So far, we [AKR Corporindo] have disbursed Rp 4 trillion,'€ he said.

The company'€™s financial report recorded sales of industrial estate land worth Rp 128 billion during the first six months of this year.

During the period, the company booked sales and revenues worth Rp 10.27 trillion or down 8.8 percent year-on-year (yoy) from Rp 11.26 trillion last year. Its costs also declined 12.81 percent yoy to Rp 9.12 trillion, resulting in its net profit to 61 percent to Rp 605.24 billion this year. (prm)