Join venture chemical plant expands capacity

JAKARTA (JP): PT Asahimas Subentra Chemical, a joint venture between two Japanese and two domestic firms, will invest US$200 million to expand its integrated petrochemical plant in Cilegon, West Java.

The company's president, Anton Kustedja, told reporters here yesterday that the expansion would raise the firm's annual production capacity of caustic soda (NaOH) from 134,000 tons to 284.300 tons, vinyl chloride monomer (VCM) from 150,000 tons to 400,000 tons and polyvinyl chloride (PVC) from 220,000 tons to 265,000 tons.

Caustic soda, or sodium hydroxide, is used in the production of rayon, soap, detergent, pulp, paper, and monosodium glutamate, while PVC is used in the manufacture of pipes and imitation leather and plastic goods. VCM is used in the production of PVC.

Besides those materials, the company also produces, annually, 29,900 tons of ethylene di-chloride (EDC), 42,000 tons of hydrochloric acid, 12,000 tons of liquid chlorine and 25,000 tons of sodium hypochlorite.

"The expansion is scheduled to be completed in the middle of 1997," he said.

Asahimas Subentra Chemical, whose plant on a 40-hectare area some 125 kilometers west of Jakarta was inaugurated by President Soeharto in August 1989, is 52.5 percent owned by Asahi Glass Co., Ltd. of Japan, 18 percent by PT Rodamas Co.Ltd. of Indonesia, 18 percent by PT Subentra of Indonesia and 11.5 percent by Mitsubishi Corporation of Japan.

Prices

Anton acknowledged that his company sold its products on the domestic market at prices 10 percent to 15 percent higher than those of imports.

"We have to sell our products at prices higher than imports because we have spent a lot of money on infrastructure development and high interest on loans," he told the Jakarta Post after press meeting in the company's headquarters in the Summitmas Tower.

"But we will be ready to compete on the world market by the year 2003, when Indonesia is committed to free trade" he added.

Indonesia, together with the other members of the Association of Southeast Asian Nations (ASEAN), is committed to removing all barriers to intra-ASEAN trade by 2003. The commitment is enshrined in the ASEAN Free Trade Area agreement.

Anton said his company exported 20 percent of its PVC output and 15 percent of its VCM output to other ASEAN countries and Taiwan and Hong Kong. The remainder is sold on the domestic market, he said.

Anton said the company imported some of its raw materials, such as industrial salt, from Australia and Middle Eastern countries.(kod)