Pertamina, PTTGC sign petrochemical marketing agreements
Monday, December 16 2013 - 09:17 AM WIB
The JV is targeted to seize the Indonesian domestic petrochemical market prior to the plan of world scale petrochemical complex development that is expected to start its operation in 2018, PTTGC said in a statement.
Apart from the recent signing of Manufacturing Joint Venture?Heads of Agreement on Dec. 10, 2013, in Jakarta, PTTGC, the Thai leading petrochemical producer and Pertamina have also advanced its partnership by signing the Marketing and Trading JVA for merging and expanding their polymer sales and distribution in Indonesia?s market.
The JVA will enable the establishment of a JV to serve a huge number of customers and to better accessing the market, prior to the incorporation of developing the petrochemical complex in Indonesia. The JVA has already been signed and is subject to further regulatory approvals for the joint venture incorporation within the first quarter of next year.
?Today?s signing marks another significant step forward for PTTGC?s and Pertamina?s commitment to strengthen our partnership for petrochemical business development in Indonesia. I?m truly delighted to see these progresses that we have made, and most impressed with this line-up of activities which no doubt will energize and vitalize the partnership between PTTGC and Pertamina. The partnership could build a venture that is well positioned in creating value for every end, especially for the Indonesian customers. The joint venture company business plan has been derived from the intensive market survey conducted jointly in the earlier stage,? Bowon Vongsinudom, President and CEO of PTTGC, said
?Following the HOA signing last April for the potential collaboration, PTTGC has supported Pertamina with our polymer product to conduct their sales and marketing activities in Indonesia. We also shared with Pertamina our market and products knowledge, in order to scale up Pertamina's advancement on petrochemical business. On top of the gradually increasing volume of material supply from PTTGC, the joint venture company will also market Pertamina?s polypropylene, produced in Plaju facility, fulfilling domestic needs and ramping up its foothold in this promising market,? said Bowon.
Indonesia?s domestic demand for petrochemical products is expected to increase, due to the positive trend of manufacturing sector. Indonesian petrochemical market value is expected to reach US$30 billion in 2025 and with this partnership, the JV is targeting to control 30 percent of market share after the petrochemical complex commercially operate in 2018. Currently, the production of petrochemical in Indonesia is still insufficient to meet the downstream industry needs, creating large import to the amount of $5 billion per year.
?As I said earlier this year in the HOA signing ceremony last April, Indonesia has the best business potential for petrochemical product marketing in this region, the size of the unmet demand, supplied by imported products at the amount of US$5 billion per year and it?s time for us to grab this opportunity. Here we come to materialize what we aimed for. The establishment of this marketing and trading joint venture company is definitely my pride and clearly in line with Pertamina?s strategy in growing the downstream business, especially for petrochemical," HanungBudya, Marketing & Trading Director of Pertamina, said
?Having PTTGC on board, as a strategic partner, we believe that they could share its strong experience in the business. Today, I can confirm that PTTGC is truly the respectable and trustful partner. The joint project team has been working hard to meet the aggressive timeline. As a result, the cooperation between the two parties has made another key milestone of achievement.? added Hanung.
Editing by Johannes Simbolon