Sales of subsidized fertilizers for food crops alone reached 6.6 million tons or an increase of 300,000 tons,Chief Executive of the holding company of state-owned fertilizer companies Aas Asikin Idat told reporters here on Saturday.
"Pupuk Indonesia has given priority to distribution of subsidized fertilizers for food crop sector," Aas Asikin said.
He said the increase in sales was attributable partly to growing exports. Exports by the company reach 770,000 tons of fertilizers mainly urea and 439,000 tons of ammonia valued at US$332 million or an increase of 60 percent from the same period in 2017.
He said the company gives priority to supplying domestic requirement for food crops under the the Public Service Obligation (PSO) program.
"Exports are allowed only when domestic requirement has been fully secured," he said, adding sales to subsidy sector especially plantations, also increased to 1,552 million tons or 200,000 tons higher than in the same period last year.
The company also recorded an increase of 12 percent in production to 5,645 million tons of all types of fertilizer and 4,346 million tons of ammonia, he said.
Efficiency has also been recorded in the use of gas as feed stock . Currently gas consumption ratio is 28.5 MMBTU per ton, lower than last year resulting in a cut in production cost.
Aas said Pupuk Indonesia will seek to increase its production of compound fertilizer NPK (natrium, phosphate and kalium) to increase its competitiveness in the global market.
He said the company has taken the necessary steps toward large scale production of NPK, production of basic materials for NPK , development of new fertilizer products, expansion of business to non fertilizer sectors, and development of integrated research center.
"Ahead we will prioritize development of non urea fertilizer products," he said. The company`s main product is urea fertilizer utilizing natural gas from Bontang.
He said currently the world urea market is over supplied. In addition , the prospects of fertilizer business is encouraging amid the growing population and shrinking farm land.
"Fertilizers with greater efficacy such as NPK are needed to increase productivity of farm lands, which are limited in availability," he said.
Recently Pupuk Indonesia launched the Project of 2.4 million tons of NPK to increase its production capacity for NPK from 3.1 million tons at present to 5.5 million tons in 2021.
The company also will build NPK 5 factory in Petrokimia Gresik with a capacity of 500,000 tons a year, Aas said.
With that capacity, Pupuk Indonesia could control the NPK market in the country especially for the plantation sector to strengthening the national food security , he said.
To support the program to increase NPK production, Pupuk Indonesia needs to secure supply of basic materials.
"The company plans to build phosphoric acid and sulfuric acid factories in Lhoksemauwe, North Aceh and buy mining companies producing rock phosphate, KCl, and DAP," he said.
Reporting by Juwita Trisna Rahayu (SYS/AS)
Editing by Albert Saragih