PETROKIMIA GRESIK STARTS PREPARING SUBSIDIZED FERTILIZER 2019

PRESS CONFERENCE

PETROKIMIA GRESIK STARTS PREPARING

SUBSIDIZED FERTILIZER 2019

Event : Signing of Sale and Purchase Agreement (SPJB)

Place : Yogyakarta

Day / Date : Monday, December 10th, 2018

Subsidized fertilizer distributors networked to PT Petrokimia Gresik (PG) signed the Letter of Agreement of sale and purchase for subsidized fertilizers (SPJB) for fiscal year of 2019 in Yogyakarta on today, Monday (10/12).

PG Marketing Director, Meinu Sadariyo, stated that the signing of the SPJB by distributors is the first step in the mechanism for distributing subsidized fertilizers.

"Subsidized fertilizers are goods under government supervision, therefore distributors and official kiosks must be administratively ordered. Today's signing of the SPJB is one form of good order in administration”, Meinu emphasised.

Based on the Regulation of Minister of Agriculture (Permentan) No. 47 of 2018, Meinu continued, the allocation of subsidized fertilizer in 2019 is set at 8.87 million tons or reduced by 676 thousand tons compared with the 2018 allocation (9.55 million tons).

"As a state-owned fertilizer producer, we are certainly ready to distribute the subsidized fertilizer as order or allocation determined by the government", Meinu said.

On this occasion Meinu reaffirmed to all distributors and official kiosks to always distribute the subsidized fertilizers in accordance with the allocated amount set by the government, both in Permentan (Ministry of Agriculture), Pergub (Regional), and Perbup (Regency).

"Official kiosks must also ensure that farmers entitled to be subsidized for fertilizer are those who are registered in farmer groups, compile a Definitive Plan for Group Necessities or RDKK, and has less than two hectares of farming land", Meinu explained.

Meinu further said that there are numbers of things need to be considered by distributors in 2019. First, distributors must promote PG products. Second, they have to establish communication with relevant agencies in the area. Third, ensuring the subsidized fertilizer distribution is in accordance with government regulations, preparing distribution reports, and fostering and supervising the official kiosks’ performance in their network.

Meanwhile, Marketing Director of PT Pupuk Indonesia (Persero), Achmad Tossin Sutawikara, expressed his appreciation for PG's initial steps in signing the SPJB for the distribution of subsidized fertilizer in 2019.

Regarding the reduced allocation of subsidized fertilizer in 2019, Tossin stated that fertilizer producers under the holding of PT Pupuk Indonesia (Persero), should see this issue as challenges, as well as opportunities which must be answered.

"The challenge is that the distribution of subsidized fertilizer must be ensured on target and in accordance with the allocation set by the government. While the opportunity is that Petrokimia Gresik must be able to maximize the sale of non-subsidized retail fertilizers and other developed products in order to prove themselves as producers of fertilizers and chemical products for agro-industry solutions", Tossin said.

To strengthen the distribution of subsidized fertilizers in 2019, Tossin continued, PT Pupuk Indonesia (Persero) will implement a Commercial Information System (SIAGA). This system is an Information Technology (IT) network to monitor stocks and realization of subsidized fertilizers distribution in Line IV (official kiosks) in real time.

"In 2019, the government will begin implementing the Farmer Card system. We look these SIAGA and Farmer Card as solutions to the adminstrative compliance of subsidized fertilizer distribution based on information technology", Tossin explained.

In the same place, PG Commissioner, Mahmud Nurwindu, advised PG along with distributor and official kiosks to always comply with all existing regulations. Special cases to the distributors and offical kiosks, Nurwindu suggested to not be involved in mistakes such as fraud, stockpiling, selling subsidized fertilizer above the highest retail price (HET), etc.

"We, as commissioners, have asked the Board of Directors of Petrokimia Gresik not to be hesitate to stop the distribution agreement if the distributors or official kiosk are proven made mistakes such as mentioned earlier", Nurwindu closed.

PT Petrokimia Gresik For further information contact:

Corporate Secretary: Yusuf Wibisono

Office: (031) 3981811

Ext. 2218

Mobile: 0811 378 571

Email: wibisono@petrokimia-gresik.com

yusufwibie@gmail.com

Yusuf Wibisono

Corporate Secretary