Salim invites PT Peni to build cracker plant<\/p>\n
JAKARTA (JP): A joint venture comprising British Petroleum
\nChemicals (BP), Salim Chemicals Corporation and four Japanese
\ncompanies has invited petrochemical company PT Peni to be
\ninvolved in a cracker project in West Java.<\/p>\n
The integration changed the ownership of PT Peni, which was
\nformerly 51 percent owned by BP, 12.5 percent by Sumitomo
\nCorporation, 12.5 percent by Mitsui and Co., 9 percent by
\nPresident Soeharto's eldest son, Sigit Harjojudanto, and 15
\npercent by the Arseto Group.<\/p>\n
PT Salim Chemicals Corporation will own a 20 percent stake in
\nPT Peni and a consortium led by the Salim Group will own 20
\npercent.<\/p>\n
BP's stake in Peni will be reduced to 35 percent, while Arseto
\nGroup and Sigit will have a 10 percent stake, and a Japanese
\nconsortium comprising Mitsui, Sumitomo, Tomen Corporation, and
\nNichimen Corporation will own the remaining 15 percent.<\/p>\n
BP's director of chemical development in Indonesia, Jim Hay,
\nsaid it was not yet clear as to which companies would be in the
\nSalim consortium.<\/p>\n
PT Peni will complete the cracker project, which is due to
\nbegin next year, in Bojonegara on the west coast of Java. The
\nplant is expected to start operation by the end of 2000.<\/p>\n
Hay said the cracker plant would benefit from captive demand
\nfrom derivative plants owned by the partnerships in the newly
\nrestructured PT Peni.<\/p>\n
Salim and Sumitomo are shareholders in PT Satomo Indovyl
\nMonomer, a producer of vinyl chloride monomer and ethylene
\ndechloride, while Salim and Tomen are shareholders in PT Styrindo
\nMonomer Indonesia, a styrene producer.<\/p>\n
\"Together this provided a high cracker loading from start-up,\"
\nHay said.<\/p>\n
He said the cracker plant might cost between US$800 million
\nand US$1 trillion.<\/p>\n
He said the project would be financed from loans from
\ncommercial banks, private placements and Export Credit Agencies.<\/p>\n
The plant will be able to produce about 900,000 tons of
\nethylene annually, he said. Ethylene is a raw material used to
\nproduce polyethylene, which is used for packaging, pipes and
\ncontainers.<\/p>\n
PT Peni currently produces 250,000 tons of polyethylene
\nyearly, 90 percent of which is sold domestically. It buys 50
\npercent of its ethylene from PT Chandra Asri and imports the
\nrest.<\/p>\n
Hay said the growth of the country's petrochemical sector was
\nsomewhat slow, but in time it would recover.<\/p>\n
The industry will have a slow growth for about 18 months
\nbecause of delayed projects and companies' inflated foreign
\nloans, but the situation will go back to normal, he said.<\/p>\n
\"In the West, we are used to experiencing a little slowdown in
\nthe industry because of recession,\" he said.<\/p>\n
\"But in every recession something good comes up, as
\ninefficient ones subside and the strong ones endure. It is a
\ncycle that in turn benefits us,\" he said.<\/p>\n
He added that although economic growth was predicted to be
\nlower next year, it would still be much higher than in many
\nWestern countries where it was usually no more than 2.5 percent,
\nhe said. (das)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/salim-invites-pt-peni-to-build-cracker-plant-1447893297",
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"sponsor": "Okusi Associates",
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