Titan acquired Indonesian petrochemical company
Malaysia's Titan Chemicals signed the agreement to acquire 100% shares of Indonesian polyethylene producer PT Petrokimia Nusantara Interindo (Peni) from Indika Group on Thursday (December 22) at undisclosed price.
Indika bought 100% shares of Peni three years ago from Beyond Petroleum, Sumitomo Corporation, and Mitsui Inc at US$50 million.
Peni is the largest polyethylene (plastic raw material) in Indonesia with combined capacity of 450,000 tones per year. But the company always in raw material problem as the country has only one ethylene cracker PT Chandra Asri Petrochemical Center which also its main competitor with 300,000 tones per yer polyethylene plant.
With the divestment, Indika would focus on coal mining and energy business. Indika is a diversified business group owned by tycoon Sudwikatmono family.
Indika bought 100% shares of Peni three years ago from Beyond Petroleum, Sumitomo Corporation, and Mitsui Inc at US$50 million.
Peni is the largest polyethylene (plastic raw material) in Indonesia with combined capacity of 450,000 tones per year. But the company always in raw material problem as the country has only one ethylene cracker PT Chandra Asri Petrochemical Center which also its main competitor with 300,000 tones per yer polyethylene plant.
With the divestment, Indika would focus on coal mining and energy business. Indika is a diversified business group owned by tycoon Sudwikatmono family.
Donald M. Condon, managing director of Titan Chemicals Corp. Bhd told me after the signing ceremony that the company is conducting a feasibility study to build olefin cracker in Indonesia to feed Peni. But he didn't disclose the timetable for the plan.
Ethylene supply is the main problem for Peni. Titan is planning to supply ethylene feedstocks to Peni from its Pasir Gudang, Malaysia facility. Dedi H. Sudarijanto, president director of Peni, admitted out of 450,000 t/y capacity, utilization rate is well below 50%. "We're running at 200,000 t/y," he said.
Both Indika and Titan declined to comment on the price of the acquisition pending on the completion of transaction which is expected by first quarter 2006.
Arsjad Rasyid, managing director of Indika Group also denied rumors of Peni's bad debts as the main reason behind the decision to exit petrochemical business.
"We're not exiting the petrochemical business as we still hold investment in other chemical plants. Peni is also in good shape," he said.
Agus Lasmono, chairman of Indika Group, admitted the group would focus on energy business. Agus and Arsjad reluctant to disclose Indika's next move. But one investment banker disclosed the group's plan to acquire another coal mining company to strengthen its energy ventures.
Indika is involved in a huge power plant project in South Sumatra and new project in West Java.
As for Titan, the acquisition would boost its polymer production capacities to 1.4 million tones per year and make it the largest in South East Asia.
Both Indika and Titan declined to comment on the price of the acquisition pending on the completion of transaction which is expected by first quarter 2006.
Arsjad Rasyid, managing director of Indika Group also denied rumors of Peni's bad debts as the main reason behind the decision to exit petrochemical business.
"We're not exiting the petrochemical business as we still hold investment in other chemical plants. Peni is also in good shape," he said.
Agus Lasmono, chairman of Indika Group, admitted the group would focus on energy business. Agus and Arsjad reluctant to disclose Indika's next move. But one investment banker disclosed the group's plan to acquire another coal mining company to strengthen its energy ventures.
Indika is involved in a huge power plant project in South Sumatra and new project in West Java.
As for Titan, the acquisition would boost its polymer production capacities to 1.4 million tones per year and make it the largest in South East Asia.
Labels: Chandra Asri, Chemical, COAL, Indika, MITSUI, Sumitomo
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