Marubeni to boost stake in Chandra Asri
Marubeni to boost stake in Chandra Asri
TOKYO (Reuters): Marubeni Corp said yesterday it may boost its
stake in Indonesia's giant petrochemical project PT Chandra Asri,
taking over shares held by its cash-strapped Indonesian project
partners.
"There is a chance that Marubeni will take over part of the
stake held by Indonesian partners, whose financial strength is
likely to be sapped by the ongoing financial turmoil," a Marubeni
spokesman told Reuters.
He also said Marubeni would never consider pulling out of the
project despite the recent social and political turmoil in the
world's fourth most populous country.
Earlier this month, the trading house said plans to raise
Chandra Asri's ethylene output capacity had been postponed by one
year due to a deteriorating financial situation on the side of
Indonesian share holders.
The plant's annual ethylene production capacity was originally
planned to be increased by 165,000 tons to 675,000 tons by the
fourth quarter of this year.
The Chandra Asri project, Indonesia's sole olefin plant, is
23.8 percent owned by a Japanese consortium led by Marubeni, with
the remaining 76.2 percent held by Indonesian companies.
Marubeni has a 89 percent stake in the Japanese consortium,
while petrochemical manufacturer Showa Denko KK and Toyo
Engineering Corp own seven and four percent, respectively.
Besides its investment in Chandra Asri totaling about 29
billion yen, Marubeni has guaranteed 57 billion yen worth of
loans extended by Japanese banks to the project.
The Marubeni spokesman said the size of the stake Marubeni may
take over was unclear at the moment, but that the Japanese
consortium had no intention of becoming a majority share holder.
"We are not going over 50 percent. After all, Chandra Asri is
like a national project for Indonesia," he said.
Other possible measures to shore up Chandra Asri's flagging
operations include shifting business focus away from the sluggish
Indonesian market to overseas markets, and adjusting the yields
of petrochemical products made at the plant in a flexible manner,
the spokesman said.
Chandra Asri currently exports about 60 percent of its
petrochemical products, with the remaining 40 percent set aside
for the domestic market.
Besides ethylene, the plant at Cilegon, about 120 kilometers
from Jakarta on the southern coast of Java, is capable of
producing 270,000 tons of propylene, 300,000 tons of polyethylene
and 240,000 tons of thermal cracked gasoline per year.
Of the 76.2 percent stake held by Indonesian firms, the Barito
Group has 29.4 percent, the Bimantara Group 22 percent, the Napan
Group 9.8 percent, and the remaining 15 percent is held by a
group of Indonesian banks, the spokesman said.