Hebang Biotech to build chemical production base in Indonesia with annual production capacity of 200,000 tons of glyphosate

On the evening of August 29, Chinese company Hebang Biotech announced that on August 28, it signed a Conditional Land Purchase Agreement with PT BERKAH KAWASAN MANYAR SEJAHTERA (BKMS), the operator and administrator of the Java Integrated Industrial and Port Estate (JIIPE) in Surabaya, East Java Province, Indonesia, for an investment of US$800 million in the construction of a chemical production base within JIIPE.

Meanwhile, Hebang Biotech signed a Letter of Intent with Indonesian firm PT AKR Corporindo Tbk (AKR), a subsidiary of AKR that holds a 60% stake in BKMS, to launch a joint venture company within JIIPE. According to the Letter of Intent, Hebang (or any of its affiliates or subsidiaries) will hold 90% shares while AKR (or any of its affiliates or subsidiaries) will hold 10% shares in the joint venture, which will be responsible for the investment, construction and operation of the project in Indonesia.

According to available information, AKR is a listed company on the Indonesia Stock Exchange (IDX) that is engaged in the trading and distribution of chemical and petroleum products, and was founded on November 28, 1977, in Jakarta, being the largest private distributor of petroleum and basic chemicals in the country. AKR holds a 60% stake in BKMS, being the operator and administrator of JIIPE.
　　
According to the announcement of Hebang on August 30, the project will receive an investment of US$800 million, and will cover a plant area of 67 hectares and produce sodium carbonate, ammonium chloride and glyphosate. The project, upon completion, will produce some 600,000 tons per year of sodium carbonate, which is a widely used chemical raw material, 600,000 tons per year of ammonium chloride, which is an important agricultural fertilizer that can provide nitrogen for plant growth while being a suitable fertilizer for palm trees, and 200,000 tons per year of glyphosate, which is the world’s most widely used and largest herbicide variety.

Hebang Biotech is the world’s largest PMIDA supplier. JIIPE is located in a special economic zone established by the Indonesian government as the first integrated industrial park in Indonesia with a deep-water port. Indonesia, where the investment was made, is an important partner country to China’s Belt and Road cooperation program, as well as an important trading partner for China.

Hebang said that the implementation of the project will enhance the core competence and competitiveness of the company, and is in line with its long-term development strategy and the best interests of all shareholders, while benefitting its sustainable development. For its next step, the company will quickly proceed with the project’s formal approval, implementation and product marketing, which will benefit both China and India.