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etroleum and chemical distributor PT AKR Corporindo (AKRA) will allocate between Rp 350 billion (US$36.35 million) and Rp 400 billion for capital expenditures (capex) next year on top of the expected investments for the construction of an integrated port in Surabaya, East Java.

“The economic growth is expected to stay above 6 percent next year. So, we are preparing for a double-digit growth in petroleum and chemical consumption [for Indonesia],” said president director Haryanto Adikoesoemo.

Between January and September 2012, the company’s petroleum sales volume increased 4 percent to 1.64 million kiloliters, while that of chemicals climbed 7 percent to 940,000 metric tons. Overall, combined sales of petroleum and chemicals generated Rp 15.29 trillion in revenues for the company, 14.2 percent higher from last year.

The expansion was needed as AKR had been appointed to distribute subsidized fuel outside Java and Bali in 2013 by downstream oil and gas regulator BPH Migas, Haryanto said. Next year, AKR will receive a quota of 267,892 kiloliters of subsidized fuel, a 160 percent rise from 2012.

At the moment, AKR runs 19 sea and inland ports in Java, Bali, Kalimantan, Sumatra and Sulawesi. The company’s other assets include 600,000 kiloliters of tank terminals, 500 trucks, 58,000 square meters of warehouses and five ships.

The company has been distributing the fuel since 2010 and currently operates 31 gas stations for subsidized fuel in East Kalimantan, Lampung, North Sumatra, South Kalimantan and South Sulawesi and West Kalimantan.

According to AKR chief financial officer Suresh Vembu, funds for the infrastructure expansion would come from AKR’s internal cash, citing the company’s strong financial position. As of September 2012, AKR’s total assets reached Rp 9.79 trillion.

The proposed capital expenditures is not final as the company’s subsidiary, PT Usaha Era Pratama Nusantara (UEPN), is still calculating investments for the construction of an integrated port in Surabaya, expecting to come up with exact figures next month.

The first phase of construction will begin in the second quarter of 2013 and is expected to take two years.

Haryanto said that funding for the integrated port project would come from two sources, a syndicated bank loan and an AKR bonds issuance. AKR is set to sell two series of bonds next month, hoping to raise up to Rp 1.5 trillion in funds.

About 35 percent of the funds, or Rp 525 billion, will be channeled by AKR as loans to UEPN for the project. The loans will mature after five years with an annual interest rate placed at plus 4.5 percent JIBOR (Jakarta Inter-Bank Offered Rate).