The factory will use farmers salt as the feed stock to be processed to turn out iodized salt with higher NaCL content of 96 percent.
Smallholders salt has only an NaCl content of 86 percent lower than the standard NaCl content for salt for human consumption.
Currently a feasibility study is being carried out to be wrapped up by the end of March, 2017, head of the Infrastructure and natural resource Bureau of the Central Java provincial administration Peni Rahayu said here on Friday.
Construction of the factory will start immediately after the feasibility study, Peni said.
The factory, to be built either in the regency of Rembang or regency of Pati, will use the technology of the Technology Application and Study Center (BPPT).
An official has said the government is optimistic the country would be self sufficient in salt supply in 2017.
Agung Kuswandono, a deputy at the office of the Coordinating Minister for Maritime Affairs said self sufficiency in salt supply is expected to be reached in 2017.
Agung said the country needs around 4.02 million tons of salt including 2.05 million tons of industrial salt and 1.97 million tons of consumption salt.
The domestic production is around 3.8 million tons a year including 3.1 million tons of farmers salt and 700,000 tons produced by the state-owned salt company PT Garam.
Based on data from the Indonesian Association of Salt Consuming Industries (AIPGI), in 2015, the country needs 400,000 tons of salt to preserve fishes a year.
The process of fish salting generally does not use iodine although iodine is important for human health, Agung said.
Indonesia imports salt especially from Australia to cover the deficit in domestic supply.
Earlier PT Cheetham Garam Indonesia said it wanted to build an industrial salt factory with a production capacity of 1.2 million tons of industrial salt a year.
The company hoped to build the factory in East Nusa Tenggara, Arthur Tanuwidjaya, chief executive of the subsidiary of Cheetham Salt Australia said.
The project, would save the country from importing industrial salt worth US$60 million a year, Arthur said.
Unfortunately difficulty in land clearing hampered immediate implementation of the project, he said.
He said the Capital Investment Coordinating Board (BKPM) has given a positive response to the project.(*)