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)