Indonesia's largest-listed energy firm, PT Medico Energy International, plans to spend $135-$144 million on three ethanol plants, a newspaper reported on Tuesday.
Investor Daily quoted Retinue Setianingsih, the company's business development and planning manager from the chemicals division, saying each ethanol plant needed an investment of around $45-49 million. She said one plant in Sumatra's Lampung would have a capacity of 60 million litres of cassava-based ethanol a year, which would be exported, to India, Korea, Taiwan and China. Indonesia has 10 ethanol factories and another four are being developed, including two owned by state trading firm PT Rajawali Nusantara Indonesia (RNI).
Indonesia's ethanol expansion is part of growing interest in biofuels production as authorities encourage alternative sources of energy to cut fuel subsidies, inflated by soaring crude oil prices. Indonesia plans to plant more than 5 million hectares with palm oil, jatropha, sugar cane and cassava by 2010 as biofuels feedstock.
The country's vast land resources and cheap labour have attracted several foreign companies to enter the biofuels industry including Malaysia's Golden Hope Plantations and Singapore's Wilma Holding Pte Ltd.
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