News Post
Chandra Asri Embarks a Feasibility Study for 2nd Petrochemical Complex
PT Chandra Asri Petrochemical Tbk (CAP), majority owned by PT Barito Pacific TbK and its strategic partner, SCG Chemicals Co., Ltd, will embark on a feasibility study to construct and operate a second integrated petrochemical complex in Indonesia which will be located adjacent to its existing integrated petrochemical complex at Cilegon, Banten Province. The new multi-billion dollar world-scale complex will comprise a 1-million t/y Ethylene Cracker and various downstream derivatives, sharing some of the existing common facilities.
The feasibility study is in line with CAP’s strategy to expand its petrochemical footprint in Indonesia to serve the growing domestic market with a burgeoning population of some 250 million, forecast annual GDP growth of above 5% and Government stimulus to improve basic infrastructure. Indonesia is structurally deficient in many petrochemical products and relies heavily on imports from other countries. In 2017, Indonesia is expected to consume an estimate around 3 million tons of Polyethylene/Polypropylene, with imports set to remain at over 1.7 million tons.
As Indonesia’s sole operator of an integrated petrochemical complex, CAP has a leading domestic market share of 30%-40%, and has built a solid integration operations framework with its existing customer base.
The Company will set up a new company to undertake this second petrochemical complex and disucss with relevant Government authorities for fiscal incentives to accelerate the project. The shareholding structure of this new business venture has not been finalized, with discussions ongoing with various industry players.
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