Tue, 21 Dec 2010

The nation’s largest petrochemical firm Chandra Asri will set aside US$100 million to build the first butadiene factory in the country through its subsidiary Petrokimia Butadiene Indonesia (PBI), the company said in a statement.

In Monday’s statement, PBI director Suhat Miyarso said the factory will be built on 40,000 square meters of land in Cilegon, Banten, and expects to produce 100,000 tons of butadiene a year.

“All of the funds for the factory investment will be taken from internal cash. We are currently preparing the bidding process for the contractor,” Suhat said, citing potential bidders from Korea, Japan and Italy to bid until March 2011.

Construction of the factory is expected to begin in June and finish in the second quarter of 2013.

Butadiene is a chemical material used to make rubber, with final products including car and motorcycle tires. “With the availability of butadiene in the country, production costs can be eliminated. Therefore, the national tire industry can have more room to grow,” Suhat said.

Car tire production is expected to reach 41 million units this year while motorcycle tire production is at 27 million units.(Est)