›

English›Fertilizer Industry, Food...

Fertilizer Industry, Food Security, and Life and Death of the Nation

Name: Fertilizer Industry, Food Security, and Life and Death of the Nation
Uploaded: 2023-07-29T00:24:51Z
Duration: 20 min 32 s
Description: In the midst of various challenges, the fulfillment of national fertilizer needs must continue. The state-owned fertilizer factory supports this fulfillment. The following are excerpts of an interview with the Managing Director of PT Pupuk Indonesia (Persero) Rahmad Pribadi.

In the midst of various challenges, the fulfillment of national fertilizer needs must continue. The state-owned fertilizer factory supports this fulfillment. The following are excerpts of an interview with the Managing Director of PT Pupuk Indonesia (Persero) Rahmad Pribadi.

This article has been translated using AI. See Original .

ADITYA PUTRA PERDANA, SUCIPTO

· 9 minutes read

The following article was translated using both Microsoft Azure Open AI and Google Translation AI.

The agricultural sector has proven to be a savior of the economy in 2020 or the early stages of the Covid-19 pandemic. This sector grew positively when other sectors generally declined. In supporting this resilience, fertilizers, as an important material for fulfilling plant nutrition, cannot be separated from their contribution.

The pandemic has caused many countries to secure commodities for domestic needs. Many ports are closed to prevent the spread of the virus. Global trade flow is slowing down. However, just as the shock to the supply chain has not yet subsided, in 2022, the war between Russia and Ukraine broke out and caused the geopolitical temperature to rise.

Amidst various challenges, the fulfillment of national fertilizer needs must continue. Fertilizer factories owned by state-owned enterprises (BUMN), under the entity PT Pupuk Indonesia (Persero), support that fulfillment. The BUMN also doesn't just stay idle. BUMN continues to move forward. For example, PT Pupuk Kalimantan Timur has been assigned by the government to build a new plant in Fakfak, West Papua, and is targeted to start production in 2028.

The following is the statement from the Main PT Pupuk Indonesia (Persero) Director Rahmad Pribadi, Friday (28/7/2023), when contacted by Kompas or when met in Bontang, Sunday (23/7/2023).

What are the short, medium and long term programs of Pupuk Indonesia?

"I am only one day old, so the program is being developed together with other directors. However, it is clear that we will be the backbone of national food security."

Even though the program is being prepared, are there any work focuses that will be carried out by Pupuk Indonesia?

At least, there are three things. First, we will continue to increase production capacity. This is like expanding to build a factory in Papua. Second, to secure the source of raw materials. Phosphorus and potassium, right, we have to import. Third, we will revitalize old factories, one of which is in Pusri, Pupuk Sriwidjaja. So, we will use technology that is low carbon intensity. (Work) that has been done at PKT will be transmitted to all fertilizer factories in Indonesia.

Also read: Mangrove Planting, One of the Commitments of the Petrochemical Industry in Decarbonization

So far, how is the contribution of fertilizer factories in supporting food security?

As the largest urea producer in Southeast Asia and the sixth largest in the Asia Pacific, such as PKT, make a significant contribution to national food security. In modern agriculture, it is impossible to talk about agriculture without fertilizer. The increase in agricultural productivity requires fertilizer. Because our market in the region is quite large, we also maintain regional food security. About 70 percent of our products are focused on domestic consumption, while 30 percent are exported.

What is the strategy to balance domestic needs and exports?

We, right, are state-owned enterprises so that our existence must always be in harmony with the national development strategy. As directed by the Minister of BUMN, we must be able to become one of the pillars of the national economy, but at the same time he also encourages Go Global.

Firstly, we prioritize the main objective, which is to maintain national food security. Therefore, we focus on the domestic market first, and when there is excess, we will expand sales to foreign countries.

Expansion is needed when a country will increase its agricultural production. Remember, by 2050, the world's population will exceed 10 billion. And 2050 is not far away, while building a factory takes time.

PKT actively uses the profits it has obtained for development.

Therefore, the CCP, for example, is actively using the profits it has earned for development. If the world's population is more than 10 billion people, while the size of the earth does not change, there will definitely be a struggle for food sources. PKT takes a position as a leading sector to secure (fulfillment) Indonesia's food needs going forward.

So, we are also preparing for the long term. In the short term, the national demand for urea is around 6-7 million tons per year, while PKT urea production is 3.4 million tons per year. We are quite significant and we still have a sister company so we can still export.

For us, food security is a matter of life and death for our nation, so we cannot only see in the short term. We must truly look ahead. The year 2045 coincides with the 100th anniversary of Indonesia's independence, and 5 years after that, there will be a population explosion in the world. So, the challenges that exist must be anticipated by us.

All of that will always be related to global conditions?

Food security in Indonesia cannot stand alone and is affected by global conditions. In the fertilizer industry, especially in PKT, we always say: what goes in fertilizer will not stay in fertilizer. So, whatever happens in fertilizer has an impact far beyond the fertilizer industry. This is a matter of food security and the life and death of the nation. If you want to maintain the survival of the nation, this is where it starts. Maintain food security and availability of fertilizer supply.

The geopolitical instability in several regions of the world has had an impact on Indonesia. This serves as a lesson for us to prepare ourselves to face all kinds of shocks. We never consider war as something positive, on the contrary, it is something bad and everyone naturally avoids it. But in reality, it happens. We must anticipate the geopolitical tensions in some countries, one of which is by strengthening the resilience of the national fertilizer industry.

That is why we want to build a new factory in West Papua. It is one of our strategies to strengthen Indonesia's food security position, namely by strengthening the national fertilizer industry's resilience. Without it, our food security will be difficult to achieve.

"That is one of our strategies to strengthen Indonesia's food security position, which is by strengthening the resilience of the national fertilizer industry."

What is the project like and why in West Papua?

We have been entrusted by the government to build a fertilizer plant in West Papua. Why there? Because West Papua has extraordinary gas resources. We all understand that for the past 10 years, the government has always encouraged downstreaming. President Joko Widodo does not want our natural resources to be exported in raw form, processed overseas, and then imported back into Indonesia. He wants an increase in value-added to occur in Indonesia.

Therefore, the gas in West Papua, which has mostly been exported as gas, will be developed into fertilizer. I am confident that the development will continue and not only one factory. We have already started the preparations and the infrastructure development will begin at the end of this year. God willing, it will start producing in 2028.

Also read: Momentum for Pupuk Kaltim to Develop Markets and Product Diversification

Some time the socialization was carried out and what were the stages after that?

"We are currently completing the land procurement process and hopefully it will be finished in the next few months. Then, we will proceed with preparing the infrastructure development. We will start building the factory next year."

Yesterday, Vice President Ma'ruf Amin visited us. Alhamdulillah, all the indigenous communities around the factory we will build agreed and are willing to support it. I am also proud because they welcomed it. Because, they saw what we did in Bontang.

"We hope that the factory we build is an inclusive industry where community participation is not prohibited, but expected."

What is the preparation of human resources for factory workers like?

Building a fertilizer factory takes a long time and a fertilizer factory is capital intensive (capital intensive) and technology intensive (technology intensive). This is a fairly complicated process. From gas, it becomes liquid, then solid form, until it is used for fertilizer. Therefore, the readiness of human resources (HR) is very important.

Education for talents from eastern Indonesia, particularly from Papua and West Papua, has been started by us since last year. This is to prepare them. Because, we aspire for the factory we build to be an inclusive industry where community participation is not prohibited, but expected. The presence of industry provides benefits, not disasters.

We hope for community participation and we ensure that it will benefit the community. So, while the factory has not been built yet, we have prepared the human resources since last year.

Also read: Pupuk Kaltim Targets Asia-Pacific Market Domination

Of all the factories currently operating, which is the largest?

Factory 5 is the latest (launched in 2015), most modern and largest in PKT. It produces 2,500 tons of ammonia and 3,500 tons of urea per day. The daily value of its products is Rp 20 billion. Almost Rp 7 trillion is generated annually by our largest factory. Therefore, it is quite significant.

In an effort to reduce carbon emissions (decarbonization), what has the CCP done?

PKT positions itself as a pioneer in the green transformation of the natural gas-based petrochemical industry. On the environmental side, we have carried out several initiatives.

First, our concept of decarbonization is with low carbon intensity technology (low carbon intensity technology). We make factories that are less efficient so that the carbon emitted is reduced. We have also used solar power plants (PLTS), implemented co-firing (mixing coal with biomass), and used electric vehicles.

Secondly, we are implementing the concept of circular economy. Carbon, which used to be considered as emissions/waste, is now being utilized as raw material for products with higher added value. An example is the soda ash plant that is currently under construction.

Third, we carry out carbon sequestration by planting trees. Until 2030, we will plant 10 million trees, consisting of 6 million mangroves and 4 million fruit trees. CCP partners will benefit from this.

In planting 4 million fruits, we involve the community. So, they may take the fruit, but we ask that the tree, as a carbon sink, be maintained. In the future, we will also develop clean ammonia with lower carbon.

Of all that we have done, thank God, this year PKT is ranked first in the application of ESG by the world's rating agency, Sustainalytics, among 73 companies (agrochemical sector) in the world. This makes us proud because we have proven that the Indonesian nation can become a role model for the global community. This shows that our direction to become a pioneer of this green transformation is already running on the right track.

In 2021 and 2022, the CCP recorded the largest net profit in history, how will it be used?

Ups and downs are inevitable. What matters is how we use the profit we have gained, when we are on top, to be used for the future. The profit we obtained last year, IDR 14.5 trillion, we reinvested in the construction of new factories and also to increase the reliability and efficiency of existing factories.

This is our strategy to continue to grow. Our hope is that no matter what the global conditions are, we can still exist. We dare not play around with the future. We are very serious, meticulous, and we want what we have gained over the years to be used wisely to anticipate future opportunities and challenges.

Editor:

MUKHAMAD KURNIAWAN

Fertilizer Industry, Food Security, and Life and Death of the Nation

About AI Translated Article