Maintain Food Security and Optimization, Indonesian Pupuk Industry Targets Export Markets

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Pupuk  Indonesia, a state-owned company that produces fertilizer, is gearing up to reach international consumers. The expansion is starting in the United Arab Emirates (UAE) region, more specifically Dubai, by establishing a Pupuk Indonesia representative office. 

Officially opened last October, the new representative office is located in Dubai due to the city’s reputation of being the strategic space to expand and reach new business opportunities. Pupuk Indonesia representative said that the new office is an opportunity to expand the company’s trading business profile.

“As directed by the Minister of SOEs (BUMN) so that Pupuk Indonesia goes global, we are expanding to get closer to the market, and are also looking for other business opportunities, especially in the field of commodity trading,” said Pupuk Indonesia Main Director, Bakir Pasaman.

The expansion is considered strategic for the company and has a major role in supporting Pupuk Indonesia’s three of five future development initiatives. Those initiatives include ensuring operational excellence and supply chain efficiency. With the Dubai strategic location, Pupuk Indonesia hopes to reach new markets while at the same time serving better for their partners in the region.

The second initiative is seeing the position of Pupuk Indonesia which has the potential to become one of the producers of products in the concept of a green and circular economy that is closely related to innovations such as green ammonia, green hydrogen, or in the medium-long term including blue ammonia and blue hydrogen. Lastly, with the application of the two previous initiatives, it’ll play a role in securing and optimizing food security for Indonesia through a better production and supply system for fertilizer. 

Bakir Pasaman also added that the presence of Pupuk Indonesia in Dubai is considered to be able to increase cost efficiency and increase EBITDA (earnings before interest, taxes, depreciation, and amortization) uplift through business development. This uplift is done by increasing sales on a Cost and Freight (CFR) and/or Cost Insurance Freight (CIF).

Not only that, but the office will also help to play an important role in ensuring smooth communication with suppliers and partners, carrying out international marketing efforts to export trade, access to technology and manufacturing companies which generally have offices in the UAE, facilitating access to purchasing of raw materials, especially raw materials for NPK fertilizers, and lastly support Pupuk Indonesia’s trading business in the future. Bakir Pasaman also noted that with the opening of the new offices, the business relation between Indonesia and UAE will continue to improve.  

“This launch is very timely. Because we have seen that over the past three to five years, the relationship between Indonesia and the UAE has been increasing exponentially. We can see how trade relations, investment, other sectors, such as people-to-people contact, and cultural relations continue to increase,” he expands as reported by Tribun News.

Reaching the International Consumer 

The effort of global expansion is not done by Pupuk Indonesia alone. PT Pupuk Kalimantan Timur (Kaltim), as a subsidiary of Pupuk Indonesia, is supporting its parent company’s effort in reaching a bigger international consumer by continuing to innovate through technological excellence and human resources. The company’s effort in expanding its wings to reach consumers can be evident in the amount of production of its products, most of which target the export market while at the same time fulfilling domestic demands.

PT Pupuk Kaltim prime export commodity is urea fertilizer. In fact, PT Pupuk Kaltim urea production achievement is currently the largest in Southeast Asia. The expansion of its parent company also opens a new export opportunity for PT Pupuk Kaltim in the middle east market and beyond. 

“But we also understand, to be able to push our way into the bigger global market, we still need to prepare a lot of things. But with the opening of the Pupuk Indonesia representative office in Dubai, this can add one more door of opportunity to open for PT Pupuk Kaltim,” said Rahmad Pribadi, President Director of PT Pupuk Kaltim.

The company has also supported Pupuk Indonesia’s initiative of strategy and sustainable innovation. PT Pupuk Kaltim has been boosting its human resources excellence along with implementing Industry 4.0 in every operational aspect by thoroughly involving digitalization and online data integration. They do this by utilizing the latest digital technology with the latest cyber security system. 

Exported Products of Pupuk Indonesia and PT Pupuk Kaltim

Pupuk Indonesia and PT Pupuk Kaltim are both responsible for supplying Indonesian farmers with both subsidized and unsubsidized fertilizers that include fertilizers like urea and NPK fertilizer. Both have excellent products that are proven to help boost farmer crop yield. 

Both companies dominate the fertilizer market in Indonesia and have a great presence in the Asia and Southeast Asia market as the bigger producers of fertilizer and fertilizer base materials, like ammonia. In fact, as of 2021, Pupuk Indonesia’s urea fertilizer export volume reached around 2 million tons, while exports of ammonia reached 715 thousand tonnes. 

Other exported fertilizers include the PT Pupuk Kaltim name-brand NPK fertilizer of NPK Pelangi or Pupuk Indonesia NPK Phonska fertilizer, which can be customized according to farmer needs. Pupuk Indonesia also produces the ZK and ZA fertilizer that contains sulfur for commodities such as tobacco. (Safaanah)

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