Marubeni sees profits for Chandra Asri in 2000

Marubeni sees profits for Chandra Asri in 2000

TOKYO (Reuters): Japanese trading house Marubeni Corp said yesterday it hopes Indonesia's giant petrochemical joint venture PT Chandra Asri will become profitable in 2000 after years of losses.

Marubeni is a member of a Japanese consortium that owns a portion of the petrochemical plant.

"We expect the economic stalemate in Indonesia to last for about one year. But in the year 2000, domestic demand and petrochemical market prices are expected to recover to the levels seen in the first half of 1997, making it possible (for the project) to become profitable," Yoshio Fujimoto, a managing director of the trading house, told reporters.

PT Chandra Asri, Indonesia's sole olefin plant, is 23.8 percent owned by a Japanese consortium which includes Marubeni, which holds 21.2 percent. The rest is held by Indonesian companies.

Marubeni had earlier hoped to see the project become profitable in the first half of 1997, although the Asian economic and currency crisis which erupted in the middle of 1997 quashed that dream, Fujimoto said.

The Indonesian joint venture posted a pretax loss of $84 million in 1997 against 1996's $120 million loss, while accumulated losses at the venture totaled $475 million as of the end of 1997, up from $391 million a year earlier.

For 1998, the economic and political unrest in Indonesia and weak market prices will eat into the project's sales, but recent financial restructuring may help limit the plant's net loss for the year to around $79 million, Fujimoto said.