Chandra Asri And TriPolyta To Merge



By John Richardson

The consolidation talked about in Indonesia for more than ten years – that between cracker operator and polyethylene (PE) producer Chandra Asri and polypropylene (PP) producer TriPolyta – is finally set to happen by January next year.

Now it will be up to the companies to make the synergies work with the most obvious big question – which we will seek to answer on the blog – how this might bolster plans for new olefins capacity.

Indonesia’s ethylene deficit is set to rise from 533,000 tonnes in 2008 to 561,000 tonnes by 2013, according to Japan’s Ministry of Economy, Trade and Industry (METI).

The propylene deficit is to rise from 517,000 tonnes in 2008 to 587,000 tonnes in 2013, again according to METI.

 

                                            Chandra Asri

Chandra Asri.jpgSource of picture: www.barito-pacific.com

 

This big import dependence has long been a drag on the economics of the Indonesian industry with an overall lack of integration another big problem.

Lack of integration is still an issue, of course, as PT Titan – the former BP-owned PE plant - is under the ownership of Malaysia’s Titan Chemicals.

So if Chandra Asri were to go ahead with a new cracker investment this might well – under the current ownership structures – only benefit the economics of its own PE production and the cost and availability of propylene supplied to TriPolyta.

Titan was recently bought by South Korea’s Honam Petrochemical and the South Korean major has told us of its plans to expand cracker capacity at Titan’s Pasir Gudang site in Malaysia.

Will this extra ethylene be used to also improve the economics of PT Titan, a big buyer of C2s, or could it be kept at the Pasir Gudang for downstream expansions there?

Could further ownership changes be on the cards?

Watch this space…..



 

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