IBRA asked to maintain Chandra's operation<\/p>\n
JAKARTA (JP): The Ministry of Industry and Trade has urged the
\nIndonesian Bank Restructuring Agency (IBRA) continue operating PT
\nChandra Asri Petrochemical Center, despite its massive bad debts.<\/p>\n
Director General of Chemical, Agriculture and Forest Product
\nIndustries Gatot Ibnusantosa said on Thursday maintaining Chandra
\nAsri's operation was vital because most of the local downstream
\nchemical industries relied on the petrochemical giant, especially
\nfor supply of their raw materials.<\/p>\n
"For example, Chandra Asri's polyethylene products supplies
\nthe country's plastic bottle, and other industries use
\npolyethylene as raw materials."<\/p>\n
If there were disruptions in Chandra Asri's operations, the
\nactivities of these downstream industries would also be
\ndisturbed, he said.<\/p>\n
Chandra Asri was placed under the control of IBRA after it
\nfailed to settle debts of about Rp 2.92 trillion to local state
\nbanks.<\/p>\n
Gatot said the government, through IBRA, should help Chandra
\nAsri and other chemical industries keep operating and help them
\nboost their production capacity.<\/p>\n
IBRA might sell the company to foreign parties if its
\nshareholders could not repay its debts, he said. "But don't kill
\nthe company."<\/p>\n
Chandra Asri is a joint venture between Japanese companies
\nMarubeni Corp. and Showa Denko KK, and Indonesian partners,
\nincluding PT Bimantara Citra, owned by Soeharto's son Bambang
\nTrihatmodjo, and PT Barito Pacific Timber, owned by timber tycoon
\nPrayogo Pangestu.<\/p>\n
The country's only ethylene producer was set up with the
\nbacking of an investment firm established by Japanese
\nparticipants.<\/p>\n
The US$1.88 billion venture has produced 510,000 tons of
\nethylene and 300,000 tons of polyethylene annually since 1995.<\/p>\n
Chandra Asri was also reported to have been surrendered to
\nIBRA as parts of the collaterals of its shareholders' debts.<\/p>\n
Prayogo, known as one of former president Soeharto's closest
\nassociates, reportedly owes Rp 2.6 trillion ($288 million) to
\nstate banks, the third largest debtor after Bambang Trihatmodjo
\nand his associates (Rp 1.9 trillion, $2.7 billion) and Hutomo
\nMandala Putra (Rp 1.7 trillion, $400 million).<\/p>\n
"Without strong upstream chemical industries, our goals to
\nbuild a strong, competitive local chemical industry can not be
\nachieved," Gatot said.<\/p>\n
He said that despite its competitive production costs,
\nIndonesia was left far behind other Association of South East
\nAsian Nations (ASEAN) countries such as Thailand, Malaysia and
\nSingapore in developing a downstream chemical industry, such as
\nan aromatic industry.<\/p>\n
He said the slow development of the local aromatic industry
\nwas the result of an absence of upstream industries for producing
\nraw materials such as paraxylene.<\/p>\n
"For example, we have to import 1 million tons of paraxylene
\nannually, because our local PTA (purified terephthalic acid)
\nindustry needs at least 1.2 million tons, while we can only
\nproduce 220,000 tons of paraxylene annually."<\/p>\n
Gatot said Indonesia would host the 29th ASEAN Chemical
\nIndustries Club Conference and the Chemical Industry Business
\nForum on Nov. 23 and Nov. 24.<\/p>\n
The conference, to be held in Bali, will discuss efforts to
\nhelp chemical industries in the ASEAN region survive the crisis,
\nand to prepare them for the global trade era.<\/p>\n
"I hope we can gain input to develop our chemical industry
\nfrom this meeting," he said. (gis)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ibra-asked-to-maintain-chandras-operation-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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