Batavindo gets $23 million loan

JAKARTA (JP): PT Batavindo Kridanusa, a Bukaka group subsidiary, secured a US$23 million loan yesterday from Indonesian and foreign banks to finance the construction its epoxy resin plant -- the country's first.

Batavindo president commissioner Fadel Muhammad said the five- year loan's interest rate would float 1.7 points above the Singapore Inter-bank Offered Rate.

The loan was lead arranged and lead managed by Dresdner (Southeast Asia) Limited with Giro Credit Bank Aktiengellschaft der Sparkassen, the Development Bank of Singapore Limited and Hua Nan Commercial Bank Limited acting as managers.

Other banks in the syndicate include PT Bank Ficorinvest, Bank Nusa Internasional, Bank Universal, Bank Dagang and Industri, Bank Dharmala and Prima Ekspress.

Fadel said construction would cost $33 million, with $10 million financed by equity.

Fadel said the plant, to be built by RHE of Germany, in West Java would have a 7,300-ton annual capacity, comprising 3,500 tons of liquid epoxy resin, 1,500 tons of solid epoxy resin and 2,300 tons of blending resin.

Scheduled to open in mid-1998, the factory is expected to export 40 percent of its output to ASEAN countries.

Fadel said the plant's annual capacity would be expanded to 20,000 tons by 2003.

Indonesia imported 7,200 tons of epoxy resin worth $22 million last year, and domestic demand for it is estimated to increase 15 percent a year, Fadel said.

Derived from petrochemicals, epoxy resin is used for coatings and adhesives in automotive, electronics, civil engineering, electric, printing and automotive industries.

The only other ASEAN country producing epoxy resins is Thailand, which produces up to 10,000 tons yearly.

Batavindo vice president Suharso Monoarfa said the company's product would be highly competitive overseas because the plant's capital costs would be cheaper than those in other countries.

Monoarfa estimated the company would sell its epoxy resin for $4 a kilogram, compared to the current international price of of $5.2 a kilogram.

He said Bukaka Korporindo and Fadel owned 20 percent and 30 percent of the company respectively, with several others owning the remaining 50 percent. (01)