INDONESIA: Asahimas Chemical to spend $400 million on plant expansion

Eddy Sutanto, a director of Asahimas Chemical, announced the expansion plan on Wednesday (22 May 2013), saying that the company is scheduled to start construction this year.

Eddy added that the expansion will allow for the increased production of caustic soda to 700,000 tons a year from the current 500,000 tons a year and will increase production of polyvinyl chloride (PVC) to 600,000 tons from 280,000 tons.

"Construction will take at least two to two-and-a-half years. The factory is expected to start producing by the end of 2015,” he added.

Asahimas has identified an increasing demand for caustic soda and PVC from domestic and regional industries and has decided to make Indonesia the production base for both chemicals.

Around 80 percent of the current chemicals produced at Asahimas are for domestic markets, while the remainder is shipped abroad.

Industry Minister M.S. Hidayat said that Asahimas's plan demonstrates the opportunities available in Indonesia's petrochemical industry.

"The expansion highlights opportunities to dominate the domestic petrochemical market,” he said.

Panggah Susanto, director general for the manufacturing industry at the ministry, said that Indonesia will need at least $18 billion in further investments in the petrochemical industry, $15 billion of which should go towards building three new oil refineries.

Panggah said that due to the lack of domestic processing facilities, Indonesia needs to import $8 billion worth of petrochemical products this year.

He added that demand for petrochemical products is growing by 10 percent a year.

Source: Daily "The Jakarta Globe", Jakarta; 23 May 2013

(Syed Rashid Ali, Karachi, Pakistan)