Pertamina and WIKA team up to develop hybrid asphalt business in Indonesia

JAKARTA, Sept. 9, 2015—PT Pertamina (Persero) and PT Wijaya Karya (Persero) Tbk (WIKA) signed today a memorandum of understanding (MoU) for a synergy in the development of a high-grade-hybrid asphalt business to anticipate growing infrastructure development in the country.

Representing companies in the signing, which took place at Pertamina headquarters in Jakarta on Wednesday (9/9), were Pertamina director for refining Rachmad Hardadi and WIKA president director Bintang Perbowo. State-owned Enterprises Minister Rini M. Soemarno, Public Works Minister Basuki Hadimuljono, Pertamina president director Dwi Soetjipto and the two firms’ board of directors also presented to witness the signing ceremony.

“The synergy between Pertamina and WIKA for the development of asphalt business is a very strategic move, especially to meet asphalt demand in the country. Through this cooperation, Pertamina as the biggest asphalt producer in the country and WIKA as a prominent construction firm will be able to strengthen their own business and support the national infrastructure development,” Rachmad Hardadi explained.

Asphalt demand in the country has been growing along with the economic growth, which needs support of infrastructure reliability such as roads, toll roads and airports. Currently, the asphalt demand in the country reaches 1.2 million tons per year. Pertamina’s asphalt production from its RU IV Cilacap (Cilacap refinery) supplies 300,000 tons of the demand. The remaining volume of asphalt needed is filled up by imports, either by Pertamina or by other firms.

Through the cooperation, Pertamina will be able to raise its production to 600,000 tons per year. Given the potential addition of natural asphalt from WIKA of 300,000 tons per year, the two companies’ total capacity will be 900,000 tons in high-grade-asphalt per year. The potential capacity will be equal to 75 percent of the national demand and will help the country to reduce significantly its asphalt import, save its foreign exchange as well as encourage a multiplier effect to the national economy.

“We have the potential of natural asphalt in Pulau Buton. We are optimistic that the potential can be realized optimally through the strategic cooperation between Pertamina and WIKA, which will be able to utilize the asphalt for its infrastructure projects,” Bintang Perbowo said.

The MoU will be a basis for Pertamina and WIKA to carry out feasibility studies to portray the potential to cooperate in asphalt business development, including the study on technical aspect such as the design of the factory, the study of operational production, the study on commercial/economics of the project and other related aspects, before finally establish a joint venture for the processing and production of hybrid asphalt. The production of the hybrid asphalt is planned to be centered in Cilacap, West Java.

“This cooperation will give a positive impact for the economy because it is in line with the government’s program to boost infrastructure development in the country. The investment poured for this hybrid asphalt business is also expected to support the development of local and national economy,” Rachmad Hardadi said.