20 June 2008 04:27 [Source: ICIS news]
By Chow Bee Lin
SINGAPORE (ICIS news)--Indonesia’s polypropylene (PP) industry plans to submit a proposal to the government next week which, if accepted, will block cuts in import duty on polyolefins supplied from Most Favoured Nations (MFNs), a senior industry official said on Friday.
“Our proposal is for the local industry to invest in new capacity over the next few years if the import duty on material from the MFNs is maintained at 10%,” Budi Susanto Sadiman, secretary-general of the Indonesian Olefins & Plastic Industry Association (INAPLAS) said.
He added that two local producers, namely Tripolyta and Pertamina had drawn up expansion plans.
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Local oil and gas major Pertamina plans to install a residual fluid catalytic cracking (RFCC) unit at Cilacep by 2012 to produce 150,000 tonnes/year of propylene, and establish a new 250,000 tonne/year PP plant in Balongan by the end of 2010, a company source said.
The producer also planned to expand its propylene capacity at Balongan city,
Pertamina currently operates a 46,000 tonne/year PP plant at
Tripolyta could not be reached for comment.
Local demand growth was expected to slow this year as the recent steep increases in PE prices would lead the local plastics processing sector to consolidate, with small plants in
“The big will get bigger and the small will be gone,” he said.
The import prices of different grades of PE have risen to $1,750-1,850/tonne CFR southeast Asia in the week ended 13 June, $55-150/tonne higher from four weeks ago, according to global chemical market intelligence service ICIS pricing.
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