Adaro Energy Expands to Indonesia's Water Treatment Sector
Indonesian coal miner Adaro Energy is not only keen on diversifying its business by including the power generation sector to its portfolio (hence having become an integrated energy company) but it is also eager to add the water treatment sector to its portfolio. This is in line with the central government's program to enhance the nation's clean water supply across the Archipelago.
Garibaldi Thohir, General Director of Adaro Energy, said the company has been serious about water treatment since last year when it acquired two water processing plants in Gresik and Banjarbaru for a price of IDR 150 billion (approx. USD $11.3 million). Through subsidiary Adaro Tirta Mandiri (which acquired the two plants), Adaro Energy will join the government's national strategic projects in the water treatment sector. By 2022 Adaro Energy targets to produce 4,000 liters of clean water per second.
The Gresik plant currently has a clean water production capacity of 400 liters per second, while the one in Banjarbaru can produce up to 500 liters per second.
Thohir said there is a shortage of clean water in Indonesia and therefore the company sees a big opportunity in this sector. It is worth noting that there are very few private companies active in the water treatment sector of Indonesia.
Adaro Energy has already joined several tenders organized by the Indonesian government for clean water projects. One of these tenders is the drinking water supply plant in Bandar Lampung (South Sumatra). For this tender Adaro Energy formed a consortium with Suez Environment (the latter is one of the shareholders in PAM Lyonnaise Jaya, or Palyja, the company that supplies clean water in the Jakarta area and is partly owned by Astra International through subsidiary Astratel). Adaro Energy owns a 55 percent stake in the consortium.
However, Adaro Energy is not the first energy company that entered Indonesia's water treatment sector. Earlier a unit of Medco Energy Internasional formed a consortium with Bangun Cipta Kontraktor to build a drinking water supply plant in Umbulan, a national strategic project that should be completed by 2019 and is designed to deliver 4,000 liters of clean water to 1.3 million people.
So far this year shares of Adaro Energy have fallen 7.30 percent to IDR 1,555 a piece.
Stock Quote of Adaro Energy - ADRO: