Mitsubishi Chem denies Indo PX

24 February 1997 00:00  [Source: ACN]

MITSUBISHI Chemical said it is not involved in Bakrie & Brothers' plans to build a paraxylene (PX) plant in Cilegon, West Java, Indonesia.

A newspaper report recently quoted Bakrie Group chairman Aburizal Bakrie as saying that the Indonesian company will build a joint-venture US$700m PX plant with Misubishi.

The report also said that Bakrie will hold the majority 80% in the venture, with Mitsubishi holding the balance 20%. Bakrie was unavailable for comment.

'We are not interested in the project right now as we do not think it is competitive. Competitive PX means competitive feedstock. Bakrie has no refinery and no feedstock. We are just watching, we will consider the project if we feel it is competitive,' a Mitsubishi official told ACN.

'Our relationship with Bakrie is strong. Naturally, they have selected us and feel that our joint venture - Bakrie Kasei - will be a logical customer for the PX.

'I think they are very optimistic and so they have used our name. They hope to persuade us to get involved,' he added.

A Bakrie Kasei source said Bakrie & Bros has plans to build a PX plant in Indonesia. However, the capacity has yet to be decided and the project is under feasibility study, he told ACN. Other sources have said that a 500 000 tonne/year plant is being studied.

'There is a big problem in sourcing raw material, and with PX in oversupply until 2000, I think it is better to purchase PX than to build capacity,' the Bakrie Kasei source added.

Bakrie & Bros is planning to make chemicals one of its core businesses. There is the possibility that proceeds from the sale of the company's interests in its two mining companies will be used to finance the PX project, a Bakrie source said.

Mitsubishi Chemical and Bakrie & Bros already have three joint ventures established in Indonesia:

• Bakrie Kasei, which produces 600 000 tonne/year of purified terephthalic acid
• Bakrie Kasei PET, which produces 40 000 tonne/year of polyethylene terephthalate (PET) resin
• Bakrie Diafoil, which produces 4000 tonne/year of PET film.

Bakrie Kasei is owned by Mitsubishi Chemical, with a 51% share; Bakrie & Bros, with a 20% share; Japan Asia Investment, with a 19% share; and International Finance Corp, with a 10% share.

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