From Government of Indonesia

Sinar Mas, Fulcrum to Build Biofuel Plant

The Sinar Mas Group has signed a deal with U.S. energy firm, Fulcrum Power Services, to build a biodiesel plant with an initial capacity of 400,000 tons a year, a company official said on Friday (4/5/07).

The plant will be built in Dumai on Sumatra and should start producing fuel next April, Danny Jozal, the alternative energy chairman at Sinar Mas, told Reuters by telephone.

The plant is expected to cost $60 million and capacity may be raised to 1 million tons from an initial 400,000 tons, he added.

The official said one of the diversified group's units, PT Bio Energi Mas, signed the joint venture on Thursday with Houston, Texas-based Fulcrum. "Sinar Mas has a 50% share in the joint venture company. It will process palm oil, olein, and stearin to biodiesel," Jozal said, adding it may also process jatropha, a shrub with oil-bearing fruits.

In late March, the company said that it would build a second plant in Malaysia's Lumut. But Jozal said it was still evaluating the plan.

Sinar Mas Group has joined several Indonesian companies that have announced plans to build biofuel plants, mostly palm-oil based biodiesel, including PT Asian AGri and PT Bakrie Sumatra Plantations , to tap global interest in biofuels.

In January, the group's palm oil unit, PT Smart, signed an agreement with Chinese oil major, CNOOC, and Hong Kong Energy Ltd. for a $5.5 billion investment to produce biofuel in
Indonesia.
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