Analysts Say Chandra Asri's Regional Expansion Strengthens Indonesia's Petrochemical Industry
Jakarta (ANTARA) - A number of analysts have assessed that the regional expansion strategy being pursued by PT Chandra Asri Pacific Tbk (TPIA) represents a significant step in strengthening the national petrochemical industry.
The expansion is being carried out through Aster Chemicals and Energy Pte Ltd, a Chandra Asri Group entity that manages energy and chemical assets in Singapore.
Kiwoom Sekuritas Indonesia analyst Miftahul Khaer said in a statement in Jakarta on Wednesday that Chandra Asri's expansion is a strategy that not only strengthens the company's regional position but also supports the reinforcement of domestic industry.
Through this entity, he said, the company gains access to more mature and stable energy and chemical markets, encompassing refinery management, ethylene crackers, downstream chemical assets, and fuel retail networks.
This move also broadens the business base across Southeast Asia whilst reducing dependence on a single business segment.
"It can be said that this demonstrates the seriousness of Chandra Asri Group in strengthening its regional position whilst supporting the national downstream industrialisation agenda, which in future could reduce import dependency and create a multiplier effect for domestic industry," Mifta said.
The existence of these regional assets is considered to reinforce Indonesia's role in the regional industry supply chain and value chain. Through an increasingly extensive operational network, the company can synergise domestic production with regional market access.
Revenue from regional assets, he said, could be reallocated to support investment and business development in Indonesia.
This approach, he continued, is deemed to be in line with government policy encouraging domestic companies to grow to a regional scale in order to be more adaptive to global dynamics, whilst strengthening the capital structure and production capacity of national industry.
In a similar vein, Stocknow capital market analyst Hendra Wardana said the acquisition of energy assets in Singapore provides strategic value for the company in managing energy market risk.
"The acquisition of energy assets in Singapore gives TPIA exposure to a more mature and stable market, whilst strengthening the company's ability to manage energy price volatility risk," he said.
He added that geographical diversification is also important for maintaining revenue stability amid fluctuations in the petrochemical industry cycle.
Beyond regional expansion, the company's strategy implementation is also reflected in domestic investment realisation, including the construction of a Chlor Alkali–Ethylene Dichloride (CA-EDC) plant in Cilegon.
This project is projected to create employment opportunities for approximately 3,000 workers during the construction phase and around 250 workers once the plant is operational.
The facility will have a production capacity of 400,000 tonnes per year of solid caustic soda or 827,000 tonnes in liquid form, as well as 500,000 tonnes per year of Ethylene Dichloride.
The presence of this plant is expected to reduce dependence on chlor alkali imports by up to Rp4.9 trillion per year, whilst all EDC production will be exported, potentially adding up to Rp5 trillion per year in foreign exchange earnings.
The expansion is being carried out through Aster Chemicals and Energy Pte Ltd, a Chandra Asri Group entity that manages energy and chemical assets in Singapore.
Kiwoom Sekuritas Indonesia analyst Miftahul Khaer said in a statement in Jakarta on Wednesday that Chandra Asri's expansion is a strategy that not only strengthens the company's regional position but also supports the reinforcement of domestic industry.
Through this entity, he said, the company gains access to more mature and stable energy and chemical markets, encompassing refinery management, ethylene crackers, downstream chemical assets, and fuel retail networks.
This move also broadens the business base across Southeast Asia whilst reducing dependence on a single business segment.
"It can be said that this demonstrates the seriousness of Chandra Asri Group in strengthening its regional position whilst supporting the national downstream industrialisation agenda, which in future could reduce import dependency and create a multiplier effect for domestic industry," Mifta said.
The existence of these regional assets is considered to reinforce Indonesia's role in the regional industry supply chain and value chain. Through an increasingly extensive operational network, the company can synergise domestic production with regional market access.
Revenue from regional assets, he said, could be reallocated to support investment and business development in Indonesia.
This approach, he continued, is deemed to be in line with government policy encouraging domestic companies to grow to a regional scale in order to be more adaptive to global dynamics, whilst strengthening the capital structure and production capacity of national industry.
In a similar vein, Stocknow capital market analyst Hendra Wardana said the acquisition of energy assets in Singapore provides strategic value for the company in managing energy market risk.
"The acquisition of energy assets in Singapore gives TPIA exposure to a more mature and stable market, whilst strengthening the company's ability to manage energy price volatility risk," he said.
He added that geographical diversification is also important for maintaining revenue stability amid fluctuations in the petrochemical industry cycle.
Beyond regional expansion, the company's strategy implementation is also reflected in domestic investment realisation, including the construction of a Chlor Alkali–Ethylene Dichloride (CA-EDC) plant in Cilegon.
This project is projected to create employment opportunities for approximately 3,000 workers during the construction phase and around 250 workers once the plant is operational.
The facility will have a production capacity of 400,000 tonnes per year of solid caustic soda or 827,000 tonnes in liquid form, as well as 500,000 tonnes per year of Ethylene Dichloride.
The presence of this plant is expected to reduce dependence on chlor alkali imports by up to Rp4.9 trillion per year, whilst all EDC production will be exported, potentially adding up to Rp5 trillion per year in foreign exchange earnings.