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Sei Mangkei Economic Zone in North Sumatra still lacks infrastructure

 New beginnings: President Joko “Jokowi” Widodo (center) listen to a presentation about a planned port development project in Kuala Tanjung, North Sumatra,in January

The Jakarta Post
Jakarta
Fri, November 27, 2015

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Sei Mangkei Economic Zone in North Sumatra still lacks infrastructure New beginnings: President Joko “Jokowi” Widodo (center) listen to a presentation about a planned port development project in Kuala Tanjung, North Sumatra,in January. The planned port is one of seven strategic projects in the province to get underway soon. (JP/Apriadi Gunawan) (center) listen to a presentation about a planned port development project in Kuala Tanjung, North Sumatra,in January. The planned port is one of seven strategic projects in the province to get underway soon. (JP/Apriadi Gunawan)

 New beginnings: President Joko '€œJokowi'€ Widodo (center) listen to a presentation about a planned port development project in Kuala Tanjung, North Sumatra,in January. The planned port is one of seven strategic projects in the province to get underway soon. (JP/Apriadi Gunawan)

A tenant of the Sei Mangkei Special Economic Zone (SEZ) in Simalungun, North Sumatera has complained that the first SEZ launched by President Joko '€œJokowi'€ Widodo, has a serious lack of supporting infrastructure.

President Director of PT Unilever Oleochemical Indonesia Biswaranjan Sen said on Thursday that the electricity demand of the factories is 15 megawatt, which has already been fulfilled, but the supply has not yet been smooth and therefore, blackout could occur three to four times a day.

"If the electricity is down, it takes 16 hours to restart our engines," he told tempo.co at his factory on Thursday.

According to Biswaranjan, his factory also needs a large port because 85 percent of the products will be exported to Unilever factories in other countries.

He said that his company has paid higher transportation costs to import their products because they had to pass through Belawan port, which was quite far from the SEZ. "So we are waiting for Kuala Tanjung Port to be operated," he added.

Economic Coordinating Minister Darmin Nasution has acknowledged that Sei Mangkei SEZ still has a lack of supporting infrastructure, and called on related parties, including government institutions to address the problem.

"The infrastructure that is needed includes a railroad, an access road from Sei Mangkei SEZ to the port, a dry port and the availability of affordable gas," he said.

PT Unilever Oleochemical Indonesia just opened the Rp 2 trillion (US$145.09 million) palm oil processing factory in the special economic zone. "We are ready to invest more after there is adequate electricity supply, gas supply and a new port," said Biswaranjan.

Unilever is the first company to build a factory in the Sei Mangkei SEZ. This is the first time Unilever has built an upstream processing factory. In the past, Unilever has usually bought the materials from other companies for its final products.

For oleochemical products only, the global needs of Unilever reach 500,000 tons. With the new facility only able to provide 200,000 tons, Unilever must still buy from other parties. However, the company plans to expand the Sei Mangkei facility. (anh/bbn)

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