Chandra Asri to start FS for second petrochemical complex

Courtesy of Chandra Asri

IDX-listed petrochemical company PT Chandra Asri Petrochemical Tbk (CAP) said it will embark on a feasibility study (FS) to construct and operate a second integrated petrochemical complex in Indonesia which will be located adjacent to its existing integrated petrochemical complex at Cilegon, in Banten Province.

?The new multi-billion dollar world-scale complex will comprise a 1-million t/y Ethylene Cracker and various downstream derivatives, sharing some of the existing common facilities,? said the company, which is majority owned by IDX-listed PT Barito Pacific Tbk and strategic partner SCG Chemicals Co Ltd, in the statement.

The statement said the feasibility study is in line with CAP's strategy to expand its petrochemical footprint in Indonesia to serve the growing domestic market with a burgeoning population of some 250 million, forecast annual GDP growth of above 5 percent and government stimulus to improve basic infrastructure. Indonesia is structurally deficient in many petrochemical products and relies heavily on imports from other countries. In 2017, Indonesia is expected to consume an estimated around 3 million tons of Polyethylene/Polypropylene, with imports set to remain at over 1. 7 million tons.

As Indonesia's sole operator of an integrated petrochemical complex, CAP has a leading domestic market share of 30-40 percent, and has built a solid integration operations framework with its existing customer base.

The company said it will set up a new company to undertake this second petrochemical complex and discuss with relevant government authorities for fiscal incentives to accelerate the project. The shareholding structure of this new business venture has not been finalized, with discussions ongoing with various industry players, it added.

Editing by Reiner Simanjuntak