MOSCOW (MRC) -- Lotte Chemical Titan, a manufacturer and distributor of polyethylene, is planning to secure USD2 billion worth of syndicated loans from local and foreign banks to fund its integrated polyethylene factory, said Jakartaglobe.
The factory will allow upstream and downstream production of polyethylene and provide Lotte Chemical Titan with an internal provider of ethylene, a compound needed to produce polyethylene.
The company's supply of ethylene currently comes from its holding company, Lotte Chemical Titan International, in Malaysia. It also still procures 2,000 to 4,000 tons of ethylene each month from petrochemical products supplier Chandra Asri Petrochemical.
Lotte Chemical plans to set aside between USD3 billion to USD4 billion for the factory, whose construction is expected to finish in three years in the Krakatau Steel industrial area in Cilegon, West Java. The company has bought 50 hectares of land for the factory and is currently negotiating to buy around 40-50 hectares more in the same area.
"We haven’t had any deal with the banks but we also have other options like issuing bonds. Although the investment value is large, we are optimistic about making a profit as we don't have to buy ethylene anymore," Lotte Chemical president director Peter Yoon said.
As MRC informed earlier, Lotte Titan restarted the 200,000 tpa No.3 linear low-density polyethylene (LLDPE) line at its Cilegon plant in west Java, Indonesia. The LLDPE line was restarted on 18 September after being shut around 10 days earlier because of a lump accumulation. A first attempt at bringing the line back on stream failed, delaying the restart by around five days. The line now is operating at about a 95% run rate.
The Lotte Group currently has a presence in Indonesia via its subsidiary, Honam Petrochemicals, which acquired Malaysia’s polyolefin major Titan Chemicals in July 2010. Included in the acquisition was Titan’s Indonesian subsidiary - PT Titan Petrokimia Nusantara (TPN), which has a polyethylene (PE) production capacity of 450,000 tonnes/year.
MRC