Jakarta. Pupuk Sriwijaya, a state-owned fertilizer producer and subsidiary of Pupuk Indonesia, has secured a financing agreement worth Rp 9.3 trillion ($591.6 million) from a group of lenders to construct a new factory in Palembang, the capital of South Sumatra.

This project is a collaboration between the state-run construction company, Adhi Karya (ADHI), and China-based Wuhuan Engineering Company. The syndicated loan involves eight banks, both state-owned and private, including BNI, Mandiri, Bank Central Asia, BRI, BTN, BSI, BJB, and BSB.

The new factory will be equipped with state-of-the-art technology aimed at increasing productivity and efficiency, according to Pupuk Indonesia's President Director Rahmad Pribadi.

The factory is expected to have a daily production capacity of approximately 1,350 tons of ammonia fertilizer and 2,750 tons of urea fertilizer, all achieved with significantly lower energy consumption.

In a separate statement, Adhi Karya revealed that it will be responsible for 15.1 percent of the total construction project valued at Rp 1.4 trillion ($89 million), with Wuhuan handling the remaining work. Construction is scheduled to commence by the end of the year and is expected to be completed within 40 months.

"The plant is anticipated to address domestic demand for subsidized fertilizers, thus supporting the productivity of Indonesian farmers and bolstering the country's food security program," Adhi Karya CEO Entus Asnawi Mukhson said.