Remarks of President of the Republic of Indonesia During the Inauguration of NPK Fertilizer Factory PT. Pupuk Iskandar Muda, North Aceh Regency, Aceh Province, February 10, 2023

Bismillahirrahmanirrahim.

Assalamu’alaikum warahmatullahi wabarakatuh.
Good morning,
Peace and prosperity be upon us all.
Honorable Minister of State Secretary, Minister of SOEs, Deputy Minister of SOEs;
Honorable Regent of North Aceh and Mayor of Lhokseumawe, as well as all the attending regents and mayors.
Honorable President Directors and Directors of SOEs, Regional Leadership Coordination Forum (Forkopimda) members of Aceh province,
Ladies and Gentlemen.

We know that currently food crises are hitting almost all countries. It means that there is an unusually high increase in food prices. We do not experience it here. Thank God, we do not experience it here. Earlier, I inspected a market in Lhokseumawe. The prices in the market in Lhokseumawe are stable, they are good prices. I see a good [price] for shallots. In other places, it costs Rp20,000. It is pricier than the one here. But, here it has a good [price], a stable one. It is good also for the rice. Oil, I see that the [price] for cooking oil is also good.

But, remember Ladies and Gentlemen, currently, food prices in almost all countries have increased drastically. It is due to the climate change. Secondly, it is the problem of fertilizers due to the war in Ukraine. Russian and Ukrainian fertilizer producers, they are big producers. It shook the agricultural sector in almost all countries. Production and productivity are decreasing. In the end, the output will decrease while its price will increase.

Secondly, the need for fertilizer in Indonesia has reached 13.5 million tons, 3.5 million [tons] are met. And, lately, I felt that every time I go to the villages, every time I go to the fields to meet the farmers, what they always say is, “There is no fertilizer, Sir. Its price is high.” If they don’t have it, if the supply goes down, it means that the price will definitely go up, especially if it’s subsidized. We need to solve this big problem.

Moreover, I see here in Aceh, there are two fertilizer factories that stop their operations, PT Aceh ASEAN Fertilizer (AAF) and PT Pupuk Iskandar Muda (PIM). The AAF and the PIM had to stop their operations. They were asked, what is the problem? “These factories had to stop operating since 2005 due to the gas problem.” If we do not have enough gas domestically, can we import it so that the factory can run?

I do not know why for decades, years, we have just let these significant assets sit idly. That is why at that time I ordered Minister Erick Thohir to make them both operate again. However, only the PIM is running for now, the AAF still has many problems to be solved and calculated. Okay, it is okay to have one of them operate first. The PIM I-PIM II, operate them. We will find the gas we need. We want these basic needs and we let them sit idly. This is what we work on.

And, the investment for the PIM reached Rp1.7 trillion both for the Industry, the NPK industry and main port facilities. However, it is clear that I want the capacity of this one to be two times of 570,000 tons, meaning 1.14 million tons. So, the output will be maximized, and we can solve the farmers’ complaints. If this maximum capacity can be reached, we have clear opportunities for exports.

If gas prices are still high now, it’s because all energy prices are currently expensive. But one day when the price drops, we should be able to settle this gas issue properly. And, I really ask for the commitment of the Ministry of SOEs, the commitment of state-owned holding company Pupuk Indonesia, the commitment of PIM’s management, to really find a solution, find a way out for the gas issue, because the key is there. So that the output will meet the expected target, 570 [thousand tons], 570 [thousand tons]. Currently, how much is the output? 500 (thousand tons).

Thirdly, we hope that the SEZ area of Arun Lhokseumawe will later become a green industrial area. Investors have started to join. And, we hope that this will affect the GRDP of Aceh province. The Deputy Minister Pak Pahala estimated that it could affect approximately 7 percent of Aceh’s GRDP. It is huge. Therefore, no matter what, state assets of this size should not go idle, do not let them stop operate.

This concludes my remarks. By saying bismillahirrahmanirrahim, I hereby inaugurate the NPK factory of PT Pupuk Iskandar Muda, North Aceh regency, Aceh province.

I thank you.
Wassalamu’alaikum warahmatullahi wabarakatuh.

(FI/MMB)