MNK expands bussiness to explosive accessories

PT Multi Nitrotama Kimia (MNK), Indonesia’s leading provider of mining explosives and blasting services, now expands its business to explosive accessories after officially operating its detonator assembly plant in East Kalimantan recently. So far, the company has focused on ammonium nitrate (AN) production.

MNK built the detonator assembly plant on a 29-hectare plot of land in cooperation with Dyno Nobel, a global leader in commercial explosives. MNK aims to strengthen its grip in domestic commercial explosive industry and reduce Indonesia’s high dependency on imported explosive accessories products.

“The detonator assembly plant is our first step to becoming an explosive accessories producer in Indonesia. So far, we only produce ammonium nitrate for blasting activities in mining industry,” MNK’s President Director Charles Daniel Gobel said recently. The company, he added, will develop other explosive products in the plant.

Local manufacturing plants enable MNK to ensure security of supply through its extensive customer distribution network. For ammonium nitrate, MNK has manufacturing plant in Cikampek, West Java province.

Timbul Siahaan, Director General of Defense Potential at the Ministry of Defense, witnessed and inaugurated MNK’s new plant, which is located in Handil, Muara Jawa regency. Timbul said the government fully supports development of domestic explosive accessories as it will help Indonesia gain autonomy in commercial explosive products.

“We want to reduce imported products by substituting them with domestic products. Currently, the ratio of imported products versus domestic products is about 30 percent to 70 percent. We expect the share of domestic products will reach 90 percent or even 100 percent in the future,” Timbul said.

As an integrated explosive provider, MNK is the only company that owns a full range of licenses to operate commercial mining explosives businesses, which makes MNK a unique company that can offer end-to-end blasting solutions.

Wawa Jaka Sungkawa, Sales and Services Director of MNK, said that the company has set an initial production target at 2.3 million pieces of detonators per annum. “It will gradually be increased to up to 6 million pieces per annum,” he said. The total domestic demand of detonator is approximately about 12 million pieces per annum.

MNK has invested about US$3 million to develop the long-awaited detonator assembly plant, Wawa said.

After the inauguration, Timbul reminded the company management to submit its production and distribution plans to the government. The plans will determine the MNK’s production quota in 2017, which will be set by the government.

Inside the new plant, there are two detonator production lines which will produce up to 2.3 million pieces of detonators per annum. Dyno Nobel provides the detonator assembly technology for the plant. Both manual and automatic technologies, which have been developed since 1960s, are in place in the facility.

During a sight-seeing around the new plant MNK took visitors to the testing ground to have a first-hand look on how the MNK detonator, or MNK Det, works. As it turns out, the detonators work well without misfire. The company also has an explosive accessories warehouse in the area.

MNK, with comprehensive supply chain throughout Indonesia, serves leading mining firms in the country, among others PT Kideco Jaya Agung and PT Pamapersada Nusantara. MNK has over 20 years of proven track record in producing Ammonium Nitrate (AN) and has recently expanded its production capacity to 150,000 tons per annum.

Itham Setiawan, Senior Blasting Officer of PT Kideco Jaya Agung, welcomes the operation of MNK’s detonator assembly plant. He said Kideco has so far been importing detonators for blasting activities.

“Imported products are relatively expensive and force us to spend longer time for logistic procedures,” he said. Itham hopes the new plant will enable MNK to offer more competitive price for explosive accessories and create other innovative products.

Welcoming the operation of MNK’s detonator assembly plant, Hendri Guyjaya, Procurement Manager of PT Pamapersada Nusantara, says security of explosive accessories supply matters. “There is certain period at the end of the year when explosive accessories supply in the market is very rare,” he said.

Hence, Hendri hopes MNK to provide security supply of explosive accessories for domestic market. Pamapersada procures 70 percent of explosive products from abroad, he said. “We have been waiting for so long to have domestic explosive accessories producer, and MNK has fulfilled it,” he said.

Hendri said domestic manufacturing of explosive accessories would benefit many as it would absorb local workforce and exempt buyers from import tax. “From the economic perspective, the plant allows us customers to reduce blasting costs,” he said.

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