Asahimas to start its third production unit despite crisis

JAKARTA (JP): Chemical firm PT Asahimas Subentra Chemical (ASC) will officially start the third production unit of its caustic soda (NaOH), polyvinyl chloride (PVC) and vinyl chloride monomer (VCM) facility on Tuesday in its Cilegon petrochemical industrial estate despite the current monetary crisis.

The company's president, Anton Kustedja, said that the new unit would increase the company's production capacity of NaOH to 285 million tons per year from its current production of 135 million tons, PVC to 285 million tons per year from 240 million tons, and VCM to 400 million tons per year from 150 million tons.

"Additional investments for the third production unit totaled US$250 million," he said yesterday.

Anton said that eight Japanese financial institutions, including Tokyo Mitsubishi Bank, IBJ, EXIM and Daichi Kangyo Bank financed the investment of the company's unit.

He said that credit from the Japanese banks would account for 70 percent of the investment, while the remaining 30 percent came from the company's equity.

He declined to mention the interest rate and maturity period of the loans.

He said total investment in the facility, including for the third production unit, had reached $500 million so far.

Anton said the company had to proceed with its third production unit despite the current currency crisis in Indonesia because it had planned the expansion program long before Indonesia was hit by the current crisis.

"We started the engineering and construction of the expansion plan two years ago," he said.

He said yesterday the current monetary crisis, which had caused a decline in the rupiah value by around 35 percent against the U.S. dollar since early July, would mean lower sales next year.

"We expect the growth of the chemical industry to stagnate next year ... but if possible not to decline," he said.

PT Asahimas Subentra Chemical is 52.5 percent owned by Japan's Asahimas Glass Co., Ltd, 11.5 percent by the Mitsubishi Corp, 18 percent by Indonesia's Rodamas and the remaining 18 percent by PT Subentra of Indonesia's tycoon Sudwikatmono, a close confidant of President Soeharto. (aly)