Trimex Signs Deal to Build US$850m Titanium Factory
Faisal Maliki Baskoro . The Jakarta Globe, Jakarta - 26/01/2011
Trimex Sands on Tuesday set pen to paper in announcing plans to build a $850 million integrated titanium complex here as Indonesia pushes to realize $12 billion of Indian investment.
The Indonesian government, represented by Industry Minister M.S. Hidayat, signed a memorandum of understanding with Trimex on Tuesday in India, a company statement said.
“This MOU with Trimex Sands is a result of a mutual commitment to develop and implement the utilization of the natural resources in the region and promote industrialization, in order to bring prosperity and well-being to the people,” Hidayat said.
The deal was a part of President Susilo Bambang Yudhoyono’s mission to India, in which he pledged to bring home $12 billion from 15 business deals waiting to be signed.
Hidayat said he would give full support to Trimex’s project, which could change the landscape of the nation’s heavy mineral industry.
“They have shown commitment as an investor in executing similar large-scale projects in different parts of the world. We are confident that their expertise and experience in this sector will help in utilizing the available natural resources in the country and create new industrial opportunities,” Hidayat said.
“The proposed integrated project will ensure a regular and committed supply of titanium pigment to end-users at a cost-effective price. This will also reduce our dependence on imported pigment.”
The end product will serve domestic demand, but the location of the factory and its production capacity were not stated.
The 10-year project is expected to begin in September and will create 2,000 jobs along with 4,500 indirect positions.
I Gusti Putu Suryawirawan, director for metal industries at the Ministry of Industry, said the government would grant Trimex tax incentives.
“We’re revising the government regulation on tax allowances for investment in special regions so that tax allowances are given to companies that process raw materials here before exporting them,” Gusti Putu told the Jakarta Globe on Tuesday.
Pradeep Koneru, chief executive officer of Trimex, said the project was important for the company as it aimed to become the largest global player in titanium feed stock.
“Trimex Sands will look for titanium and zircon-rich deposits and high-grade titanium feed stock deposits,” he said.
“There are large untapped resources in Indonesia and we are upbeat about the project tapping into these resources. The production capacity of the plant will depend on variable factors like raw materials, infrastructure for power, water, as well as road and rail links.”
Hidayat said the nation had around 40 million tons of ilmenite, a source of titanium, concentrated mostly in Papua. Indonesia imports around 46,000 tons of titanium dioxide pigment yearly.
Trimex Group in cooperation with UAE-based Ras Al Khaimah plans to invest $5 billion in Indonesian projects.