PT Chandra Asri to halt production for six weeks

PT Chandra Asri to halt production for six weeks

JAKARTA (JP): The PT Chandra Asri Petrochemical Center is to
halt its production activities for 42 days from June 12 to
complete preparations to increase its design capacity.

"We hope that we'll resume operations in August with a bigger
production capacity," the company said in a statement over the
weekend.

According to the statement, the only ethylene producer in
Indonesia, plans to increase its production to a pre-engineered
level of between 670,000 and 720,000 tons per year. It did not
elaborate.

Currently Chandra Asri, which started operation in May 1995
with a total investment of US$2 billion, has a design capacity of
510,000 tons of ethylene per year, 240,000 tons of propylene,
300,000 tons of polyethylene and 230,000 tons of pyrolysis
gasoline.

The statement said that the chemical firm will award a
contract for the building of two fireboxes in its cracker. "With
these two fireboxes, we'll increase our production capacity of
polyethylene to fulfill the rising demand on the local market,"
it said.

Commenting on the planned expansion, Chandra Asri's chief
executive officer Peter F. Gontha noted that the temporary
shutdown would take place as the prices of ethylene and propylene
were increasing.

"We'll certainly lose this encouraging momentum. But we want
to increase our capacity to meet the local demand," he said.

Peter said that by the expansion, Chandra Asri will be able to
enlarge its contribution of saving Indonesia's foreign exchange
for imports.

He claimed that with the current design capacity, his company
can help the country save about $700 million in foreign exchange
spending per year if local midstream industrial plants buy all
their materials from the firm.

Chandra Asri, which was granted tariff protection of 25
percent for both its ethylene and propylene products in February,
is jointly owned by businessmen Prajogo Pangestu, Henry Pribadi
and Bambang Trihatmodjo -- President Soeharto's second son -- and
Marubeni, Toyo Engineering and Showa Denko of Japan.

During the first year of operations, Chandra Asri manufactured
322,000 tons of ethylene, 185,000 tons of propylene, 160,000 tons
of pyrolysis gasoline and 178,000 tons of polyethylene.

The company has sold its propylene production entirely to PT
Tri Polyta Indonesia, Indonesia's largest polypropylene producer
which is owned by Prajogo Pangestu, Bambang Trihatmodjo and their
business associates.

Eighty percent of its ethylene production is sold to local
companies operating at its production base in Cilegon, West Java,
while the other 20 percent is exported.

The company's pyrolysis gasoline has all been exported for
further processing overseas.

The company procures its condensate feedstocks from the
Kangean gas field off East Java and naphtha from the Cilacap oil
refinery in Central Java and from the Middle East. (13)