Petrindo ties up with BP Chemical to make solvents

Petrindo ties up with BP Chemical to make solvents

JAKARTA (JP): PT Inter Petrindo Inti Citra and Britain's BP
Chemicals signed yesterday a joint venture agreement to develop a
US$20 million esterification plant in Cilegon, West Java.

Inter Petrindo president Peter F. Gontha said that the plant,
the first of its kind in Indonesia, would produce ethyl acetate
and butyl acetate (solvents), the raw materials for the
production of paint, ink, cosmetics and pharmaceuticals.

The joint venture, PT Citra Pacific International Esters, is
equally owned by Inter Petrindo and BP Chemicals.

According to Gontha, Inter Petrindo is owned by the majority
shareholders of ethylene producer Chandra Asri Petrochemical
Center, including President Soeharto's son Bambang Trihatmodjo
and timber tycoon Prajogo Pangestu.

BP Indonesia chemicals development director Jim Hay said the
joint venture would start constructing the plant in the first
quarter of 1998 and would come on stream by the end of the year.

Hay said the plant would produce 50,000 tons of ethyl acetate
and butyl acetate a year in the first years of production and the
plant's capacity would be expanded to produce another 120,000
tons of ethyl acetate a year at the turn of the century.

He said PT Citra Pacific would sell all its products on the
domestic market and would find markets overseas once it expanded
the plant's capacity.

"All solvents (ethyl acetate and butyl acetate) currently used
in Indonesia are imported," said Hay, putting the local demand of
solvent at about 20,000 tons a year with between 10 percent and
15 percent growth a year.

Feedstock for solvents include acetic acid, ethanol and
butanol, said Hay.

He said PT Citra Pacific's solvent plant would be supplied
with acetic acid from a Malaysian facility 70 percent controlled
by BP Chemicals, while disposal of ethylene industry would be
supplied by Indonesia's sole ethylene producer, Chandra Asri.

"The cost of raw materials is so small because the plant needs
to pay for Chandra Asri's disposal. This makes the plant very
competitive with other plants," Gontha said.

BP established its first business relations with Chandra Asri
more than a year ago when they agreed to supply the BP-controlled
polyethylene producer PT Peni with ethylene. The ethylene is
supplied daily via a 16-kilometer pipeline linking Peni and
Chandra Asri's facilities.

Chandra Asri and BP signed a joint venture agreement in August
last year to set up a polyisobutylenes facility in Chandra Asri's
facilities in Serang, West Java. (jsk)