Tri Polyta, Japanese firms sign joint venture

JAKARTA (JP): PT Tri Polyta Indonesia, the country's biggest polypropylene resins producer, yesterday signed a joint venture agreement with Nippon Shokubai and Tomen Corporation of Japan to produce acrylic acid and acrylic ester.

The agreement was signed by Tri Polyta's president, Sudwikatmono, Nippon Shokubai's president, Kaida, and Tomen's vice president, H. Hirata, at the Grand Hyatt hotel here.

Under the agreement, Tri Polyta will acquire 45 percent interest in the joint venture, to be called PT Nisshoku Tripolyta Acrylindo, while Nippon Shokubai and Tomen will respectively hold 50 percent and 5 percent.

Sudwikatmono told journalists after the signing ceremony that the establishment of the venture, which is Tri Polyta's first step to diversify its products, is also aimed to replace imports of acrylic acid and acrylic ester.

"This joint venture will be the first entity in the country to produce such chemicals. Our partnership will combine Tri Polyta's manufacturing process management with the advanced technology of Nippon Shokubai and Tomen's extensive trading networks," Sudwikatmono stated.

Sudwikatmono said the total investment required for the venture is about US$100 million, of which 40 percent will be financed with equity.

"The remaining 60 percent will be financed with syndicated loans," Tri Polyta's vice president, Henry Pribadi, said. "We have appointed Industrial Bank of Japan and Daiwa Bank to act as lead managers of the loan syndication."

He said the venture will build a plant at an industrial zone near the site of Tri Polyta's existing plant in Cilegon, West Java, with a designed annual capacity of 60,000 metric tons of crude acrylic acid.

The construction is expected to be completed in the second quarter of next year.

"The acrylic acid to be produced will be used to manufacture 20,000 tons of high purity acrylic acid, 20,000 tons of ethyl acrylate, 40,000 tons of butyl acrylate and 40,000 tons of 2- ethyl hexyl acrylate," Tri Polyta's executive president for sales and marketing, Markus Hartanto, said.

High purity acrylic is widely used in the production of specialty polymers, including super absorbent polymers, a major component of disposable diapers and feminine hygiene products.

Acrylic ester is used in the production of acrylic fibers, paints, resins, adhesive, wire and cable.

Markus also said that 65 percent of the production will be sold on the domestic market, while the remaining 35 will be exported through Tomen's agents.

Currently, the domestic utilization of both acrylic acid and acrylic ester reaches 60,000 tons per annum.

He added that the raw material for the production of acrylic acid or propylene will be supplied by PT Chandra Asri. The materials for acrylic ester are acrylic acid and OXO-alcohol, which will be produced by Tri Polyta.

Sudwikatmono said that the joint venture will gradually raise its production capacity to meet domestic needs. (alo)