▲ SK Engineering & Construction announced on the 20th that it signed a Technical Service Agreement (TSA) and a Memorandum of Understanding (MOU) on the 12th for an eco-friendly asphalt project with WIKA Indonesia. Kim Byung-kwon, Head of Oil & Gas M&BD Group at SK Engineering & Construction (left), and Bambang, President of WIKA Bitumen (right), have completed signing the agreement and are shaking hands. (Photo by SK Engineering & Construction)
[Asia Economy Reporter Chunhee Lee] SK Engineering & Construction is partnering with a local state-owned enterprise in Indonesia to promote the development of eco-friendly asphalt technology.
On the 20th, SK Engineering & Construction announced that on the 12th it signed a Technology Service Agreement (TSA) and a Memorandum of Understanding (MOU) with WIKA (PT Wijaya Karya), a state-owned construction company in Indonesia, for an eco-friendly asphalt project. Established in 1960, WIKA is the largest state-owned construction company in Indonesia. Its main businesses include infrastructure construction such as roads, ports, and railways, and it also invests in power plants, smelters, regional development, solar power, and electric motorcycles.
About 20 officials attended the signing ceremony held in Jakarta, Indonesia, including Kim Byung-kwon, Head of Oil & Gas M&BD Group at SK Engineering & Construction, Bambang, President of WIKA Bitumen, and Tumiyana, President of WIKA.
With this agreement, SK Engineering & Construction becomes the first Korean construction company to enter the Indonesian asphalt market. SK Engineering & Construction will first conduct a technical diagnosis of the asphalt production plant operated by WIKA Bitumen and then provide solutions. WIKA Bitumen, a subsidiary of WIKA, currently operates a plant on Buton Island in Sulawesi Province, Indonesia, that uses eco-friendly technology to convert natural rock asphalt sourced from the island into high value-added asphalt. The plant has an annual production capacity of 2,000 tons. Unlike conventional asphalt production that uses water, this plant does not use water, resulting in fewer pollutants discharged through water.
WIKA is planning to improve the performance of this facility and pursue large-scale asphalt plant investments and commercialization in the future. SK Engineering & Construction will provide solutions through a six-month technical diagnosis and assist in optimizing plant operation and commercialization.
After commercialization, SK Engineering & Construction plans to secure licenses for new technologies through joint technology development with WIKA. By 2025, they will also carry out the Front-End Engineering Design (FEED) and EPC (Engineering, Procurement, and Construction) for an asphalt plant on Buton Island with an annual production capacity of 700,000 tons. Currently, Indonesia imports about 1.45 million tons of asphalt annually. Upon project completion, it is expected to replace about half of these imports, approximately 700,000 tons.
SK Engineering & Construction and WIKA have been in close consultation since last year to promote this project. The Indonesian government is actively fostering the asphalt business as a national policy project. Especially, road network expansion is identified as the top priority in the infrastructure sector, and asphalt demand is expected to continuously increase, indicating high growth potential.
SK Engineering & Construction proposed the development of an asphalt business model to WIKA, and WIKA highly evaluated SK Engineering & Construction’s technology and experience, leading to this agreement. Through strategic cooperation, both companies plan to jointly develop the entire business process from the early stages of technology development, joint licensing, EPC, operation support, to marketing. Furthermore, this project is expected to serve as a foundation for cooperation between the two companies not only in the oil and gas sector but also in infrastructure, power generation, and renewable energy fields in Indonesia.
An SK Engineering & Construction official said, “Through a strategic partnership with WIKA, SK Engineering & Construction plans to successfully carry out the scheduled follow-up projects starting with the technical diagnosis. Based on this, we plan to expand our business scope into eco-friendly business sectors in the future.”
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
