JAKARTA – PT Chandra Asri Petrochemical Tbk. is still conducting a series of studies to make a reference to whether to build the Petrochemical II (CAP) II petrochemical complex in 2020.
The company plans to build CAP II which is predicted to require investment of up to US $ 5 billion for land, infrastructure and physical. The Company considers the development of the complex to capture a rise in petrochemical product demand that grows 5% annually.
In 2017, the company budgeted US $ 221 million for capital expenditure, of which US $ 77 million was used to conduct a CAP II development study while also paying for land purchase.
This year, the company has budgeted US $ 568 million for capital expenditure, of which US $ 207 million will be used to finance the preparation of CAP II development. The study takes a long time, so the company targets CAP II development decisions to be taken in the first quarter of 2018.
Director of PT Chandra Asri Petrochemical Tbk. Suryandi said the development of CAP II will be synergized with existing factories, so the company can capture the added value of the business development.
“We are still studying this CAP II development, it is expected that by early 2020, the company can decide on its final investment to start. Construction will take about three years, “Suryandi said in Jakarta, Thursday (15/3/2018).
Suryandi said Chandra Asri’s current production, both polypropylene and polyethylene products, accounts for only 30% of the domestic market, while 50% is still imported. If it does not increase capacity, the company could potentially lose its market share.
Related to the investment of US $ 5 billion for the development of CAP II, the company has not detailed details of funding sources. Nevertheless, unofficial discussions have been made with two of Chandra Asri’s majority shareholders, PT Barito pacific Tbk. and SCG Chemicals Company Limited.