Sichuan Hebang Biotechnology Co. (Hebang), a Chinese firm, has committed to a substantial investment of US$ 800 million (IDR 12 trillion) for a chemical production plant within the Java Integrated Industrial and Port Estate (JIIPE).
Sichuan Hebang Biotechnology Co., Ltd., formerly Sichuan Hebang Corporation Ltd, is a China-based company, principally engaged in the manufacture of chemical products. The Company operates its businesses through three segments, including Agriculture segment, Chemical segment and New Materials segment.
In an important move towards bolstering the industrial landscape, both entities have solidified their commitment through a Conditional Sales and Purchase Agreement (CSPA) with PT Berkah Kawasan Manyar Sejahtera (BKMS), a subsidiary of PT AKR Corporindo Tbk (AKRA). This agreement focuses on land acquisition for the establishment of a Petrochemical plant within the JIIPE economic zone.
Spanning an expansive 67-hectare area within the JIIPE, Hebang’s proposed facility aims to produce a range of chemicals, including Sodium Carbonate (commonly known as soda ash), Ammonium Chloride (a vital agricultural fertilizer rich in nitrogen), and Glyphosate, the world’s most widely used herbicide.
Upon completion, the plant is projected to achieve annual production capacities of 600,000 tons of Sodium Carbonate and Ammonium Chloride, while the production capacity for Glyphosate is estimated to reach 200,000 tons.
Simultaneously, Hebang has also entered into a term sheet with AKRA to establish a joint venture entity. This joint venture will serve as the investment, construction, and operational platform for the chemical production project in Indonesia.
Hebang is set to hold a majority stake of 90% in the joint venture, while AKRA will retain a 10% ownership stake.
Hoped to bring substantial benefits
Bambang Soetiono, President Director of BKMS, expressed optimism regarding Hebang’s entry into the JIIPE, emphasizing the substantial benefits it brings.
The investment is expected to inject much-needed foreign capital and provide access to world-class products for various Indonesian industries.
“JIIPE’s Special Economic Zone will provide all necessary facilities and support for Hebang to establish and operate the chemical production facilities,” he stated, on August 31, 2023.
Hebang highlighted its active participation in the Belt and Road initiative and underscored the strategic advantage of JIIPE’s geographic location in Surabaya.
Coupled with Indonesia’s abundant resources, the establishment of the production plant within JIIPE will enable Hebang to expand its market presence and enhance the global influence of its products.
