Mitsubishi Chemical expand Indonesia facility US$260 million

PT Mitsubishi Chemical Indonesia, a wholly owned subsidiary of Japan's Mitsubishi Chemical, will expand its purified therephthalic acid (PTA) plant in Merak, Banten province, Indonesia with additional investment of US$249.75 million.

PTA is the main raw material for polyester staple fiber (for textile manufacturers) and PET resin (plastic raw material). PTA is the preferred raw material used to produce Polyethylene Terephthalate (PET) or polyester. The major applications for polyester are in fiber, bottles, films and molded containers. In the textile industry, polyester, alone or in a blend with cotton, wool or other synthetic fiber, is used in fabrics for clothing and home furnishings. For industrial markets, woven polyester fibers are used in automotive tire cord and seat belt application. Polyester resins are also widely used in molded containers for food, beverages and mineral water. Additionally, polyester films is used as a recording medium for audio and video tapes and as film in medical X-ray equipment.

Mitsubishi currently operates a 650,000 t/y PTA plant in Merak, the largest in Indonesia. The new plant would have installed capacity of 400,000 t/y.

Is this the sign of awakening of Indonesia's chemical industry after years of slowdown? What's happened with other PTA producers such as PT Polysindo Eka Perkasa, PT Amoco Mitsui Indonesia, PT Polyprima Karyareksa, and Pertamina?

Await my special report on Indonesian PTA and chemical industry...my favourite topic.

Mitsubishi Chemical's PTA plants are located in four countries. Japan with 250,000 t/y, South Korea through Sam Nam Petrochemical Co (1.6 million t/y), Indonesia (650,000 t/y) and India (470,000 t/y). Besides the PTA, Mitsubishi also operates a PET film plant in Merak with installed capacity of 20,000 t/y.

Mitsubishi is the largest PTA producer in Indonesia. Other producers are:

- PT Polyprima Karyareksa = 480,000 t/y

- PT Amoco Mitsui Indonesia = 350,000 t/y

- PT Polysindo Eka Perkasa = 350,000 t/y

- PT Pertamina = 225,000 t/y

It brings the country's total PTA capacity at 2.1 million tones per year. With conversion factor of 670 kg of paraxylene to produce 1 ton of PTA, Indonesia needs at least 1.3 million t/y of paraxylene. The problem, Indonesia has only two aromatic centers producing paraxylene with combined capacity of 775,000 t/y leaving almost half the demand from import. So why Mitsubishi wanted to expand PTA plant in Indonesia without enough domestic supply of paraxylene? The new plant would bring Mitsubishi's capacity to 1.05 million t/y which translates to 670,000 t/y paraxylene consumption.

READ MORE!!!