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Pupuk Indonesia to issue Rp 3.56 trillion in bonds
State fertilizer holding company PT Pupuk Indonesia is looking to issue bonds worth Rp 3
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tate fertilizer holding company PT Pupuk Indonesia is looking to issue bonds worth Rp 3.56 trillion (US$267.92 million) this month to refinance its own debt and that of subsidiary PT Pupuk Sriwidjaja Palembang.
Pupuk Indonesia corporate communications head Wijaya Laksana told The Jakarta Post on Monday it would use 84 percent of the targeted proceeds to help repay Pupuk Sriwidjaja’s investment loan.
“The rest of the bonds proceeds will be used to repay [Pupuk Indonesia] bonds that were issued in 2014,” he told the Post.
The upcoming bond issuance — part of its shelf offering plan that aims to reap a total of Rp 10 trillion — will consist of two series.
The A series, worth Rp 1.48 trillion, offers a 7.9 percent annual coupon and will mature after three years. Meanwhile, the B series, worth Rp 2.08 trillion, offers an 8.6 percent annual coupon, due after seven years.
Pupuk Indonesia has appointed PT Bahana Sekuritas, PT BCA Sekuritas, PT BNI Sekuritas, PT Danareksa Sekuritas and PT Mandiri Sekuritas as underwriters for the debt paper sale, with the offering period running until July 7.
As a holding company, Pupuk Indonesia oversees the operations of 10 firms, five of which are major fertilizer producers.
They are PT Petrokimia Gresik, PT Pupuk Kujang Cikampek, PT Pupuk Kalimantan Timur, PT Pupuk Iskandar Muda and Pupuk Sriwidjaja.
Wijaya said the holding company had expanded its overall production capacity through the establishment of PUSRI II-B plant, which has been operating since March 2017 in Palembang, South Sumatra.
“PUSRI II-B, with a production capacity of up to 907,000 tons per year, replaces the old PUSRI II and it is expected to increase the production up to 457,000 tons this year, 1.56 percent higher than PUSRI II’s production,” he said.
According to data from the company, Pupuk Indonesia produced 10.46 million tons of fertilizer in 2016, consisting of 6.46 million tons of urea, 2.76 million tons of NPK, 464,982 tons of SP-36 and 755,330 tons of ZA type.
The volume fell from 10.9 million tons in 2015, which Wijaya attributed to adjustments to market demand as it shifted some production to ammonia.
Meanwhile, the production volume for its non-fertilizer products — ammonia, phosphoric acid and sulfuric acid — reached 6.75 million in 2016.
“The shift means we are producing commodities that have good prices in the market right now,” Wijaya added.
For 2017, Pupuk Indonesia has set total production volume at 11.7 million tons.
The company is building another factory in Gresik, East Java, named Amurea 2, which is expected to produce 660,000 tons ammonia and 570,000 tons urea per year.
It is also focusing on strengthening its products marketing, especially for non-subsidized and research-result products.
“We plan to add to the capacity production of NPK fertilizer because the domestic market is really promising. We will also start to penetrate the petrochemicals industry by developing a [petrochemical complex] project in Bintuni, West Papua,” he added. (rdi)
