Tri Polyta profit soars

PT Tri Polyta Tbk, the largest polypropylene manufacturing in Indonesia, reported on Tuesday (March 2) that its net profit skyrocketed to Rp 483 billion in 2009 after posting a loss of Rp 14 billion in previous year, partly due to foreign exchange gains.

The surge in bottomline was in line with a jump of operating profit to Rp 783 billion from a modest Rp 63 billion a year earlier. Tri Polyta posted forex gain of Rp 148.44 billion in 2009 in line with rupiah appreciation last year, compared to forex gain of Rp 77.63 billion in previous year.

The net profit rise also reflected in its earning per share (EPS), which surge to Rp 663 per share against loss per share of Rp 19 in previous year. Its sales, however, was slightly lower 5% at Rp. 4.74 trillion compared to Rp 4.99 trillion in 2008. Its assets edged up 15.7 percent to Rp 2.75 trillion from Rp 2.38 trillion in previous year.

Tri Polyta is a subsidiary of PT Barito Pacific (BRPT) Tbk. The company is expanding its polypropylene plants in Merak, Banten province. The company sourced its raw material (propylene) from sister company PT Chandra Asri Petrochemical Center (CAPC). (Roffie)

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Lautan Luas profit drops 70%

Chemical distributor and manufacturer PT Lautan Luas (LTLS) Tbk reported net profit of Rp48.98 billion in the first half 2009, dropped 70% from the same period last year on lower operating margins.

Lautan Luas recorded net sales of US$182 million in H1 2009, declined 16% from the same period last year, while its cost of sales and service only down 8%. Operating expenses almost unchanged in the period. As a result, Lautan Luas reported operating profit of Rp96.6 billion, dropped 67% from the same period last year.

The company's total asset also declined 7% to Rp2.88 trillion in June 2009. Lautan Luas is controlled by Masrin Family. The company is also a partner of Djarum and Wings Group in the oleochemical business.

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Titan Kimia profit jumps 164%

Polyethylene and bi-axially oriented polypropylene producer PT Titan Kimia Nusantara (FPNI) reported net profit of Rp241 billion in the first half 2009, surged 164% from the same period last year.

Titan Kimia, a subsidiary of Malaysia's Titan Chemicals Sdn Bhd, reported better operating margins in the period where sales increased but cost of raw materials declined.

Titan Kimia reported operating profit of Rp297 billion, jumped 118% from the same period last year. Titan Kimia operates two polyethylene (PE) resin plants in Merak, Banten province with combined capacity of 450,000 tons per year. This is actually bigger than PT Chandra Asri Petrochemical Center (CAPC) which has 300,000 tons per year of PE capacity. But CAPC's PE plant is integrated with ethylene supply from its own naphtha cracker.

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State fertilizer cos booked US$210 M profit

PT Pupuk Sriwijaya, parent company of state-owned fertilizer producers, reported net profit of Rp2.112 trillion last year, surged 32% from 2007 on higher sales and operating margin.

According to Pusri's financial report published this morning, the company recorded net sales revenue of Rp36 trillion or about US$3.6 billion (at Rp10000/USD) last year, jumped 63% from 2007 at Rp22.2 trillion.

Pusri is the parent company of PT Petrokimia Gresik, PT Pupuk Kujang, PT Pupuk Kaltim, PT Pupuk Iskandar Muda, and PT Rekayasa Industri (engineering firm). Pupuk Kaltim is in the process to raise funds from the capital market.

Pusri booked operating profit of Rp4.78 trillion last year, increased 73% from 2007 and then net profit of Rp2.12 trillion (against Rp1.58 trillion in 2007).

Pusri had a consolidated asset of Rp31 trillion as of December 31, 2008, increased 36% from December 2007. The fertilizer companies normally produce ammonia, urea, and compound fertilizers.

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Lautan Luas injects Singapore subsidiary

Chemical distributor and manufacturer PT Lautan Luas (LTLS) Tbk has added S$8.66 million into the capital of Lautan Luas Singapore Pte Ltd. 

With the injection, the Singapore subsidiary will have total capital of S$30.66 million. Lautan Luas told Capital Market Supervisory Agency (Bapepam) today that the capital injection is part of the company's efforts to strengthen its business and network overseas.

Lautan Luas is a leading chemical player with total assets of around US$350 million. The company reported net profit of Rp145.9 billion last year, doubled from Rp71.7 billion in 2007, while sales revenue surged to Rp4.46 trillion or about US$440 million.

Lautan Luas Singapore has total asset of around US$100 million. LTLS also controls three JVs in China and two subsidiaries in Thailand and one in Vietnam.

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Hartono Gunawan resigned from Unggul Indah

Hartono Gunawan has resigned as president commissioner of alkyl benzene producer PT Unggul Indah Cahya Tbk for undisclosed reason.

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Salim Group won Philippine water privatization

Salim Group's subsidiary Metro Pacific Investment Co (MPIC) and its partner DMCI Holdings Inc won the competitive bidding to acquire 83.9% shares of Maynilad Water Services Inc from Philippine govt at USD447 million. MPIC is the local unit of Salim Group's Hong Kong-listed First Pacific Co., which also controls Philippine Long Distance Telephone Co. (PLDT), the country’s largest telecom service provider. This is one of the largest overseas investment from Salim in recent years besides the USD5 billion investment in India.

Salim Group's other major investment is Dalu Coal Chemical Industrial Park in Mongolia, which has recently started its construction in Zhunge er County of Erdos City. The company also invests USD240 million on dairy farm in the country.
Few years back, Salim acquired 45% shares in Cosco Property Group with USD500 million. This gave the Salim group an entry into Shanghai’s booming real estate business. How about Indonesia, where Salim started to build up its fortune?

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Wynford in soda ash venture

Wynford Finance Ltd, a BVI company, has entered into a JV with PT Bengalon Limestone to establish a soda ash plant in East Kutai, East Kalimantan province with US$85 million investment. Both companies establish PT Bengalon Chemical Industry for that purpose. Previously Wynford established a JV with Kobexindo, one of the largest heavy equipment distributor in Indonesia, to build cement plant in Kutai.

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Introducing, Chemical News Indonesia

A friend journalist has developed a blog, Chemical News Indonesia. Mainly about recent developments or particular projects in the sector. Could be a good alternative source of information. Take a tour to the site, http://chemicalnews.blogspot.com.

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Export growth 16.42%, manufacturing the weakest

Indonesia recorded total export of US$55.77 billion in January-July 2006, grew 16.42% from the same period last year, thanks to higher commodity (oil, gas, coal & agriculture products) price.

According to the latest report from Central Bureau of Statistics (BPS), manufacture products only posted 13.78% growth while its contribution to the total export is 64.64%. Oil & gas export growth was 19.19% with mining products the highest growth of 29.36%. Agriculture products booked a healthy 17.24% growth thanks to 63.8% export growth of rubber and articles, followed by 15% growth in vegetable oil.
Coal export grew almost 42% in the period.
Manufacturing sector deserved serious attention due to its huge contribution in employment, especially in urban areas. Export of products under HS 85 (Electrical Machinery, Sound Recorders, Television Image), for example, decreased 0.5% while HS 84 (mechanical machinery) down 11.9% and organic chemical slipped 6%. Textile and apparels surprisingly recorded 9.6% growth in Jan-Jul, but decreased 12.7% in Jul against June.
Like the previous reports, my other concern is the oil and gas trade balance. In the Jan-Jul period, Indonesia booked net surplus of US$1.647 billion in oil and gas trading, almost double from US$981 million in the same period last year. But the refined oil products deficit has grown from US$4.1 billion to US$4.74 billion in Jan-Jul 2006.
Increasing domestic demand for fuel amid relatively no additional refining capacity would boost significanty the import and cut further the oil & gas surplus (mainly contributed by natural gas export).

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Malaysia's CCM expanding fertilizer

PT CCM Agripharma, a JV between Malaysia's Chemical Company of Malaysia Berhad and Perconic Resources Sdn Bhd, is investing US$26.7 million to expand its organic compound fertilizer plant in Deli Serdang, North Sumatra. The new facility could produce NPK fertilizer of 70,000 t/y.

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Banten gubernatorial race

Hold your breath for the Jakarta gubernatorial race which is a year away. Let's talk about the breathtaking race in the newly established Banten province at the western tip of Java island only weeks away. Who are the candidates?

Three pairs to contest:
First, Rt Atut Chosiyah (Golkar) endorsed by PDI-P as governor candidate. She won the PDI-P Banten chapter convention, beating PDI-P's own cadre and popular artist Mrs Marissa Haque (PDI-P legislator). Mrs Atut also won Golkar Party's convention in Banten to make her the front runner in the election.
Second, Dr Zulkieflimansyah (legislator from PKS). His running mate is Mrs Marissa Haque (PDI-P).
Third, Tubagus Iman Aryadi (Golkar executive), endorsed by president SBY's Partai Demokrat.
The election is worth attention as Banten is the stronghold of Golkar party which won the 2004 election with 16 seats at the local legislative (DPRD), followed by PDI-P (12), PKS (11), Partai Demokrat (8), and PPP (8).
Banten is the home of many multinational investments. Cilegon regency is the largest center of chemical industry in Indonesia. Mitsubishi Chemical, for example, operates the largest purified therepthalic acid (PTA) plants of South East Asia in Cilegon regency. Chandra Asri (olefin center), Titan's PENI (polyethylene), Tri Polyta (polypropylene), Asahi Chemical's EDC to PVC plants, Cabot's carbon black, Amoco Mitsui's PTA plant, Polyprima's PTA plant, Polychem's glycol, Bayer MaterialScience, etc. Cilegon is also the steel-related industry center with the largest steel manufacturer PT Krakatau Steel and Australia's BHP Steel facilities there.
The much-talked-about Bojonegara port is also there with efforts to make it a special economic zone (SEZ). The Merak port is main access linking Java and Sumatra islands.
Banten raised public's attention on social issues when Tangerang, Banten's most populous municipality, under the spotlight after the issuance of a controversial bylaw to eradicate prostitution in 2005. Bylaw No. 8/2005 bans people in public places, places visible from the street or in red-light districts, from persuading or coercing, either through words or gestures, others into acts of prostitution.
The municipality's council also promulgated bylaw No. 7/2005 which bans the distribution and the sale of alcoholic drinks, except in three to five-star hotels and licensed restaurants for on-the-spot consumption.
There's so much at stakes, but I have no clues in which directions these governor candidates would take the province to. Anybody?

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Berlian divest another vessel

PT Berlian Laju Tanker (BLTA) Tbk, a marine transport company listed in Jakarta Stock Exchange (JSX) and Singapore Stock Exchange (SGX), is planning to sell one unit of vessel of the company's fleet to Singapore-based First Ship Lease (FSL) Ltd at US$45 million. BLTA divested two chemical tankers in May.

The vessel, named Prita Dewi, will be leased back by BLTA. The vessel is chemical tanker with 19,990 DWT tonnage. FSL is owned by HSH Nordbank AG, Bayerische Hypo-und Vereinsbank AG, and Schoeller Holdings Ltd.
BLTA is owned by PT Tunggaladhi Baskara (45.35%), Mr Widihardja Tanudjaja (0.06%), Berlian Employees Cooperative (0.06%), and public (54.53%). The company has total assets of Rp7.68 trillion as of June 30, 2006 and net profit of Rp547 billion. In 2005, BLTA booked net profit of Rp645 billion.
Read previous articles:
1) Berlian to divest two chemical tankers
2) Berlian on US$600 million actions

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Yani Alifen, new CEO of UIC

Listed chemical company PT Unggul Indah Cahaya (UIC) Tbk, the largest detergent raw material producer in South East Asia, promoted Yani Alifen as its new president director/CEO replacing Hartono Gunawan.

Mr Alifen was vice president director of UIC since 1995. Yani is also treasurer of Petra Christian University Foundation.
Meanwhile Mr Gunawan has been appointed chairman of commissioners of UIC replacing Andi Hartandi. Gunawan is also the chief of Salim Group's chemical division.
UIC is a JV between two conglomerates, Salim & Wings Group. The company produces alkyl benzene sulphonate (ABS), the raw material for detergents and other surfactants.
Wings is owned by two families, Katuari & Sutanto. Handoyo Sutanto is the new director at UIC, while Hanny Sutanto and Teddy Jeffrey Katuari as commissioners. Plus Jimmy Masrin from Lautan Luas (key partner of Wings), may be the war between Salim-Wings in noodle business as I posted many times in the past has been in Wings' favour. What do you think?

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Indonesia Gas War Part II

The decision of Downstream Oil and Gas Regulatory Body (BPH Migas) to appoint Bakrie Brothers as the operator of 1,200 km long gas pipeline linking East Kalimantan and Java has sparked Gas War II in the country.


Upstream Oil and Gas Regulatory Body (BP Migas) Chairman Kardaya Warnika responded immediately the decision with his same-old statement that the gas reserves in East Kalimantan will not enough to support the pipeline.
We have two alliances at odds. First, BP Migas with gas producers in East Kalimantan such as Chevron (previously Unocal), Total Fina, and Arco/BP, PT LNG Badak (a joint venture of some companies) plus POG which plans to build new LNG plant in Bontang, and LNG customers in Japan, South Korea, & Taiwan (plus may be later on China). On top of this, several major gas customers in East Kalimantan such as PT Pupuk Kaltim (ammonia and urea producer), PT Kaltim Methanol Industry (methanol), PT Kaltim Pasifik Amoniak (ammonia), and PT Kaltim Parna Industry (ammonia).
Second, BPH Migas with domestic customers in Java and local pipe manufacturers which will take benefit out of the pipeline project.
The first group might say, sorry we have no more gas for you (Bakrie pipeline) because we have long-term contracts in hands at US$9/MMBTU. We could consider not to renew the contracts when they matured, but you have to pay the same export price. No way we will sell at US$3/MMBTU. Transporting gas to Java may help gas supply for power plants and manufacturing industries in Java, but at US$3/MMBTU, the country lost the foreign exhange earning of US$6/MMBTU. Without gas supply, no way that Bakrie could build the pipeline. Japanese LNG buyers are reportedly furious about the pipeline plan.
The second group, on the other end, 'may' push government to implement what we understand as Domestic Gas Obligation (DMO) wherein gas producers have the obligation to sell their output to domestic market first. But at what price, that's the question. This group argues gas pipeline would create more multiplier effects than exporting LNG.
What are the multiplier effects? Boost the pipe manufacturing industry, for sure, including Bakrie's pipe business. Power generation may be next in line because out of 10,000 MW new power plants to be built in the next five years, most will be coal-fired, not gas-fired. So this argument might be considered weak. Besides, if the country really want to develop multiplier effect of natural gas, why not build more gas-based chemical plants in East Kalimantan along with the power plants?
East Kalimantan already the largest ammonia producer in the world with more than 4 million tones per year capacity (through Pupuk Kaltim, KPA & KPI); the largest methanol (through KMI & Methanol Bunyu) with 1 million tones/year; and the largest urea producer in one site (3 million tones/year). We could build more of such plants, not to mention the mid-stream chemicals like acrylonitrile, caprolactam, nitric acid or ammonium nitrate (raw material for explossives, increasingly important with the growing mining industry in Indonesia/the world), all of which uses natural gas as feedstock.
The strategy to build more manufacturing facilities outside Java would deconcentrate both people and energy consumption in Java, right? And it's politically correct in the decentralization strategy.
The war is on and the winner might be decided by politics & power play instead of economic reasons.

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People on The Move

Brokerage and investment firm PT BNI Securities Tbk, a subsidiary of state-owned bank PT BNI Tbk, appointed Hindarmojo Hinuri as the new president director replacing Sudirman following a capital market investigation over the company's mutual fund operation.

Hindarmoyo is the former president director of Surabaya Stock Exchange (SSX), director at Jakarta Stock Exchange, and PDFCI Securities. He is 53 years old. Isn't he too old for the job?
Meanwhile, Danny Jozal retired from his position as CEO of chemical company PT BASF Indonesia, a subsidiary of Germany's BASF AG. Malaysian Henry Tan replaced Jozal.

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Tomen enter fuel distribution business

Japan's Tomen Corp through its subsidiary PT Tomindomas Bulk Tank Terminal has entered fuel import and distribution with target revenue of Rp660 billion per year.

Four years ago, fire burnt down 13 chemical tanks operated by Tomindomas---a company dealing with chemical storage in Cilegon, Banten province.
Few months ago, government, through Investment Coordinating Board (BKPM) awarded a license to expand the company's facilities in Cilegon with new investment of Rp165.25 billion.
Local company PT AKR Corporindo, also a bulk chemical storage, had entered fuel importing and distribution business earlier than Tomindo since October 2005. AKR is the first company entered the business long controlled by state-owned oil and gas company PT Pertamina.

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Eramet reaffirms Weda Bay project

Weda Bay, Halmahera in Molluca Islands will be Indonesia's next Soroako (giant nickel production facility run by International Nickel/Inco). France-based Eramet president Jacques Bacardats is in Jakarta this week to reaffirm the company's future plan for Weda Bay mineral project that may cost US$1.5 billion.

Early this month Eramet acquired controlling stakes of Weda Bay Minerals Ltd, an exploration and development company that
controls the Halmahera Nickel Cobalt Project at Weda Bay, Halmahera in Eastern
Indonesia. Halmahera is one of the largest undeveloped nickel projects
globally. State-owned mining company PT Aneka Tambang Tbk hold 10% shares in the project.
Simon Sembiring, director general for mining at the Energy and Mineral Resources Ministry told the press after the meeting between Energy Minister Purnomo Yusgiantoro and Bacardats that Eramet plans to produce nickel consentrates in Weda Bay. "But they might also produce nickel there, depend on the feasibility study," he said.
The plant in Weda Bay could produce up to 60,000 tones per year of nickel.
Eramet is an integrated mining and metallurgy group that produces non-
ferrous metals and their chemical derivatives, high-performance special
steels, nickel alloys and superalloys and high-performance parts for industry.
So far, Inco is the largest nickel producer in Indonesia through its Soroako, Sulawesi Island operation. Inco's installed capacity is around 70,000 tones of nickel consentrates per year and is working on US$250 million expansion project to boost the capacity by 30% to 90,000 tones/year.

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Eterindo sales jump 284%

Listed chemical company and the first major producer of biodisel, PT Eterindo Wahanatama Tbk reported 284% growth in sales revenue in 2005 at Rp407.44 billion.

According to its behind the schedule publication of 2005 financial report, Eterindo recorded lower operating profit at a mere Rp722 million. But the company managed to book net loss of Rp2 billion, dropped significantly from Rp38 billion in 2004.
Eterindo started to supply biodiesel to state-owned oil and gas company Pertamina few weeks ago. The company produces 60 tones/day of biodiesel and is working on expansion to bring the capacity to 200,000 tones per year.

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Berlian to divest two chemical tankers

Seaborne transportation giant PT Berlian Laju Tanker Tbk plans to sell two units of chemical tanker currently under construction at a shipyard in Japan to First Ship Lease (FSL) Ltd, a Bermuda incorporated and Singapore based commercial finance company, at US$90 million.

According to its information to shareholders today, Berlian Laju--listed in Jakarta Stock Exchange (JSX) with total assets of Rp7.9 trillion (US$850 million) as of Dec 2005, will lease back these vessels capable to carry 22,050 m3 each.
Berlian argues that the transaction provide diversification of financing methods and is profitable because the sale price is higher than the new building contract price.
Berlian reported operating revenue of Rp2.6 trillion in 2005, doubled from Rp1.35 trillion in the previous year with net profit of Rp645.18 billion, almost trippled the previous year of Rp243 billion.
PT Tunggaladhi Baskara is the largest shareholder in Berlian with 45.36% and public investors at 54.52%.The divestment is pending shareholder's approval.

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