PKT Flexes Muscles Through Papua Fertilizer Industry Construction
PT Pupuk Kalimantan Timur (PKT), a PT Pupuk Indonesia (Persero) subsidiary, is developing a specialized fertilizer industrial area in the Fakfak Regency of West Papua. Pupuk Indonesia CEO Rahmad Pribadi said this industrial zone will support the government’s food security program. According to Rahmad, the construction of Indonesia’s first fertilizer industrial area began in Palembang, South Sumatra, in 1959, followed by Gresik, East Java, in 1972.
The project continued in Cikampek, West Java, in 1975 and in Bontang, East Kalimantan, in 1977. The most recent development, Rahmad noted, was the establishment of a fertilizer industry in Aceh in 1982. “This means that this project marks the creation of a new fertilizer industrial area in Indonesia after four decades,” he said on Nov 25. The West Papua fertilizer industrial zone will include a factory that can produce 1.15 million tons of urea fertilizer and 825,000 tons of ammonia per year.
The government claims that the new fertilizer industrial area in West Papua will strengthen PT Pupuk Indonesia’s position as the largest fertilizer provider in the Asia Pacific, Middle East, and North Africa regions.
This specialized area, listed under the National Strategic Projects, is expected to employ 10,000 workers during its construction phase and 400 workers once operational. The potential economic growth contribution through the use of local components is estimated at Rp 10 trillion, with business turnover in the area reaching Rp 650 billion per year.
For Pupuk Indonesia, this industrial zone could serve as a hub to address fertilizer needs in Eastern Indonesia. According to Pupuk Indonesia, subsidized fertilizer consumption in Eastern Indonesia reaches 375,492 tons, not counting the greater demand for non-subsidized fertilizers.
Therefore, Pupuk Indonesia and the State-Owned Enterprises Ministry aim for the fertilizer plant in this area to start production in early 2028 and to become part of Pupuk Indonesia’s holding facilities.
With an investment of US$1 billion, Pupuk Kalimantan Timur targets the Fakfak fertilizer industrial area to support food security by supplying 4.5 million to 5 million tons, or 70-80 percent of the national urea fertilizer demand.
This aligns with the predicted urea requirement of 6 million to 7 million tons by 2030. Pupuk Kalimantan Timur selected Fakfak for the fertilizer industrial area due to its proximity to the Tangguh Field gas source, a primary raw material for fertilizer production.
Information obtained indicates that the Fakfak industrial area will not only host a fertilizer plant. PT Freeport Indonesia plans to build a copper smelter in the area as part of the requirements to extend its special mining permit (IUPK) for an additional 20 years until 2061.
The smelter and fertilizer plant are expected to stimulate the local economy and have a broader domino effect across Papua and Eastern Indonesia.
However, the government must also consider the local workforce absorption by the new specialized fertilizer area. In various regions, the minimal employment opportunities provided by large-scale projects often lead to new issues, potentially leading to horizontal conflicts if not addressed.