MOSCOW (MRC) -- Indonesian manufacturer, PT Chandra Asri Petrochemical Tbk has started the operating of the Methyl Tert-butyl Ether (MTBE) and B1 plants, which are the first in the country, said the company.
The construction of both factories was carried out by Toyo Engineering Corporation and PT Inti Karya Persada Tehnik since 2018. According to the minister of industry, Agus Gumiwang Kartasasmita in an official statement said, the petrochemical industry in Indonesia has an important role in substituting imports. Based on the ministry data, in 2018, Indonesia is still importing methanol chemical products, including derivatives, namely MTBE and B1, worth of Rp174 trillion.
"Apart from import substitution, petrochemical companies like Chandra Asri are also able to attract new investors which will certainly have a positive impact on the Indonesian economy," he added.
President Director of the producer, Erwin Ciputra, stated, with the operation of this new factory, he hope that the government’ goal of reducing imports by 35 percent in 2022 can be achieved. On August 26, the largest integrated petrochemical company has completed the issuance of a Rp1 trillion bond.
The issuance will be used the proceeds to fund Chandra Asri’ working capital as part of its Integration Master Plan, with its MTBE and Butene-1 plant projects. The chemical producer has allocated capital expenditure (capex) USD294 million in 2020.
Director of the issuer, Suryandi explained, the company will use the internal cash to meet the capex. He said, the company still had cash of around $649 million as first half (1H) of 2019. The new factories he said were built with an investment of USD130.5 million with a capacity of 127,000 tons per year.
While the Butene-1 plant will have a capacity of 43,000 tons per year. These new factories will absorb Raffinate-1 to be used as raw material. In October of 2019, Chandra Asri will also complete the construction of a polyethylene and polypropylene factory.
With the operation of these two new factories, the company’ production capacity could increase to 4.2 million tons from the current 3.9 million tons. After operate four new factories in this year, Suryandi revealed, the company will also complete the construction of the CAP 2 factory in June 2024.
The manufacturer will allocate around USD5 billion to build the factory. The company is looking strategic investors to build the plants. The director stated, “After CAP 2 is operational, our production capacity can increase to 8 million tons."
The subsidiary of PT Barito Pacific Tbk as the majority shareholders, is the largest integrated petrochemical company producing olefins and polyolefins. The company factories located in Cilegon and Serang, Banten Province. The company is the only producer who operates a naphtha cracker and is the sole domestic producer of ethylene, styrene monomer and butadiene.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's DataScope report, PE imports to Russia dropped in January-June 2020 by 7% year on year to 328,000 tonnes. High density polyethylene (HDPE) accounted for the main decrease in imports. At the same time, PP imports into Russia rose in the first six months of 2020 by 21% year on year to 105,300 tonnes. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.
In addition, CAPC is also the largest polypropylene producer in Indonesia, including produces plastic raw materials and chemicals used for packaging products, pipes, automotive, electronics, others.