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Jakarta Post

AKR sets up new subsidiary to run electricity business

  • Anggi M. Lubis

    The Jakarta Post

Jakarta   /   Tue, March 10, 2015   /  06:27 am

Fuel distributor AKR Corporindo is looking to enter the power plant business, having set up an energy company through subsidiaries to supply its under-construction industrial estate in East Java.

The publicly listed company announced in a written statement submitted to the Indonesia Stock Exchange (IDX) website on Monday that the company had established a Surabaya-based company, Energy Manyar Sejahtera, through its subsidiaries Usaha Era Pratama Nusantara (UEPN) and Andahanesa Abadi (ADH).

The newly established company is a joint venture between UEPN and ADH and two other firms, Santiniluwansa Lestari and Amanah Indo Invest.

UEPN and ADH hold a 75 percent combined stake in the new firm, while Santiniluwansa and Amanah own the remaining 25 percent, AKR Corporindo corporate secretary Suresh Vembu told The Jakarta Post over the phone.

Suresh said that the energy company would handle a power plant project to supply electricity to the company'€™s Java Integrated Industrial and Port Estate (JIIPE) in Gresik, East Java, operating the power plant as an independent power producer.

'€œThe power plant itself is still undergoing a feasibility study with an interested investor,'€ he said, adding that the company could not disclose how much the investment, the capacity and the power source for the planned plant would be until the study was concluded.

'€œWe want the first phase of JIIPE to be completed within three years, including the infrastructure, so we might want [the power plant] to be finished concurrently. The prospects will be good; there will be many factories operating that need power,'€ he went on.

Suresh did not reveal the project'€™s authorized and paid-up capital, saying only that it was relatively small as AKR had yet to prepare the investment needed for the power plant.

However, AKR last week injected around Rp 780 billion (US$60.14 million) of fresh funds into UEPN, which Suresh claimed was to support the subsidiary in working on JIIPE.

UEPN is the AKR Corporindo unit that focuses on JIIPE. AKR has teamed up with state-owned port operator PT Pelabuhan Indonesia III (Pelindo III) for the construction of the integrated industrial estate.

JIIPE, worth between Rp 7 and 8 trillion, will consist of an industrial estate, a port and other supporting facilities, such as a toll road and railroad connections.

The first phase of JIIPE construction, about 800 hectares of a total 1,760 hectares of the estate, entered development and marketing in 2014. The project itself is expected to be completed by 2023.

Suresh said that AKR had sold 27 hectares of land from the industrial estates by the end of last year.

On a previous occasion, AKR president director Haryanto Adikoesoemo said that the company had earmarked up to $1.5 billion for the construction of two power plants to supply energy to the industrial estate.

Haryanto said late last year that each of the power plants was designed to produce 2x300 megawatt (MW) to generate additional income for AKR from energy sales. One of the power plants would be fueled by natural gas, while the other would be coal-fired, he said.

He added that the project was expected to start this year and was scheduled for completion in 2018.

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