Bakrie tightens grip

Bakrie tightens grip
in petrochemicals

CILEGON, West Java: PT Bakrie Kasei Corporation, an
Indonesian-Japanese joint venture, yesterday started the
expansion of its purified terephthalic acid (PTA) mill and the
construction of a polyethylene terephthalate (PET) resin plant.

Government confident and tycoon Aburizal Bakrie, chief
commissioner of the company, told newsmen here that the expansion
of the PTA plant and the establishment of the new PET plant will
need a total investment of US$282 million.

The expansion project, that will cost $202 million, will
double the company's PTA production capacity from 250,000 tons
per annum to 500,000 tons in 1996.

PTA is a raw material for the production of polyester fiber
and tire cords.

The joint venture established the PTA plant in 1992 with an
investment of $329 million.

"We will become the biggest PTA producer in Southeast Asia
after the completion of the expansion project," said Aburizal,
who is fondly referred to as "Ical".

Aburizal, also chairman of the Indonesian Chamber of Commerce
and Industry (Kadin), said the PTA industry does not receive any
protection from the government.

Besides the joint venture, PTA is also produced by the state
oil company Pertamina at its 225,000-ton-capacity plant in
Palembang, South Sumatra.

Aburizal said he is optimistic that the country's annual
demand for PTA will steadily increase from 335,500 tons estimated
for this year to 375,000 tons next year and to one million tons
by the year 2000.

The price of PTA increased by 44.5 percent to $657 per ton
last year.

The PTA plant is 56 percent owned by Mitsubishi Kasei
Corporation of Japan, 15 percent by Bakrie & Brothers, 10 percent
by the International Finance Corporation, an affiliate of the
World Bank, and 19 percent by Japan Asia Investment Company.

PET

Aburizal said the PET resin plant, that will be built within
four years with an investment of $80 million, will have a
designed capacity of 40,000 tons per year.

PET resin is a raw material for the production of plastic
packaging and textile fibers.

Aburizal said his PET resin project has good prospects because
it will be the first of its kind in Indonesia.

He said demand for PET resin was estimated at 50,440 tons last
year.

The PET resin project is equally owned by Mitsubishi Kasei,
Bakrie & Brothers, Toyobo Corporation of Japan, the International
Finance Corporation and Japan Asia Investment.

Aburizal said the joint venture is expected to recover the
costs of expansion and new projects within seven years. (04)