Siemens Venture to Produce Power Turbines in Indonesia

Siemens AG signed a an agreement with PT Nusantara Turbin dan Propulsi today to form a venture to produce industrial steam turbines in Indonesia. PT Nusantara Turbin Propulsi is a company that manufactures aircraft components and industrial turbines in Indonesia. It also offers aero engine maintenance services.

Siemens will hold a 60 percent stake in the venture and Nusantara the rest, the companies said in a joint statement distributed to reporters in Jakarta earlier this week. Total investment may reach 12 million euros ($17 million), the statement said.

“Siemens intends to expand its presence in Indonesia’s growing energy market,” said Markus Tacke, chief executive officer at Siemens’s oil and gas division for industrial power of the energy sector. “We see a huge potential in the steam turbine markets for domestic consumption to support Indonesia’s aggressive acceleration program for electricity generation.” “[The joint venture] also aims to develop various industries, such as sugar, fertilizer, crude palm oil, cement, oil refinery and chemical,” Tacke said, adding that both companies would build production facilities for industrial steam turbines.

The venture is expected to start production from a plant in Bandung, West Java province in the first quarter of 2011 with initial annual output of 40 units of steam turbines, the statement said. The total investment is expected to be ¤12 million (US$16.94 million) with projected manpower of 100 employees.

PT NTP executive Supra Dekanto told reporters that the joint venture company would build Siemens SST-140 steam turbines with capacity between 3 and 15 megawatts (MW). “Siemens is also willing to develop capacity up to 250 MW,” he said, adding that SST-140 turbines could be used at fertilizer and sugar factories. “There will be two types of the SST-140 turbines: condensing and back pressure types. The turbines can turn garbage, sunlight and waste into steam and then electricity,” he said. “There is also the possibility in the future to produce and deliver geothermal steam turbines up to 55 MW,” he added without elaboration.

The joint venture aimed to supply four units of turbines by the end of next year and 40 units per year by the end of 2012, with state-owned electricity and fertilizer companies being the primary customers. “The turbine production will fulfill an Industry Ministry regulation requiring a minimum 40 percent local content,” Supra said.

Sources: Bloomberg, The Jakarta Post

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