Tie-ups: Chandra Asri/INA to pursue chlor-alkali plant in Indonesia; Petronas Chemicals to expand specialties portfolio with acquisition of Perstorp

Chandra Asri Petrochemical, Indonesia's largest integrated petrochemical company, and Indonesia Investment Authority (INA), the nation’s sovereign wealth fund, have signed a Memorandum of Understanding (MoU) to collaboratively develop a world-scale chlor-alkali plant in Indonesia. INA, along with other potential international investors, will explore taking an equity stake in PT Chandra Asri Alkali (CAA), a wholly-owned subsidiary of Chandra Asri that has been established as a special purpose vehicle to invest in the development of the world-scale chlor-alkali plant.

Once operational, the plant will produce more than 400,000 tonnes/year of caustic soda (also known as sodium hydroxide), and 500,000 tonnes/year of ethylene dichloride (EDC). As part of the accelerated development of this plant, Chandra Asri has signed an basic engineering and licensing agreement with Asahi Kasei Corporation (AKC) from Japan for the development of world-scale chlor-alkali plants.

CEO of INA, Ridha Wirakusumah, said, “We are thrilled to join forces with Chandra Asri, Indonesia's largest integrated petrochemical producer, as we embark on this strategic partnership. This collaboration aligns perfectly with our prioritized investment theme to support the downstreaming of the nickel value chain – a critical component for the development of the electric vehicle industry. By working together, we aim to significantly reduce Indonesia's import dependencies of Caustic Soda and bolster our nation's economic resilience. Chandra Asri's market leadership and demonstrated expertise make them an ideal partner for INA to execute this project. This partnership is a testament to our shared commitment to fostering a sustainable and prosperous future for Indonesia."

President/CEO of Chandra Asri, Erwin Ciputra, said, "This downstream asset investment is in line with our core strategy of achieving transformational growth via CAP 2, our second world-scale petrochemical complex. As a core component of the total CAP 2 portfolio package, this chlor-alkali plant will help meet Indonesia and South-East Asia’s growing needs for caustic soda and EDC. We are delighted to explore this opportunity with INA that will reduce Indonesia’s imports and boost the nation’s exports, in a meaningful and sustainable way.”

Caustic soda is a critical input for Indonesia’s growing downstream industries, such as alumina extraction, nickel extraction, water treatment, textile production, pulp and paper production, as well as soap and detergent production. Ethylene Dichloride is a core intermediary chemical input to produce polyvinyl chloride (PVC), which is widely used in numerous end-use applications including construction and packaging. This investment clearly supports Indonesia’s ambitions as one of the world's largest nickel producers, to position itself in the global electric vehicle value chain to meet the growing needs for caustic soda, as growing worldwide electric vehicle adoption will drive demand for nickel, a key battery material.

In other news, Malaysia’s Petronas Chemicals Group Bhd (PCG) is focusing on expanding its specialties portfolio after posting a strong performance in 2022 amid geopolitical conflicts, market volatilities and general industry challenges.

PCG said its landmark acquisition of Sweden-based Perstorp Group resulted in further diversification of the group’s product offerings, specifically for its specialty chemicals portfolio.

“The company launched BRB Group’s new lube oil additives manufacturing facility in the Netherlands to serve as a global lube oil additives and chemicals hub for PCG. In addition, two projects achieved the status of Final Investment Decision (FID), namely the development of a melamine plant in Gurun, Kedah, and the expansion of the 2-ethylhexanoic acid (2-EHA) plant in Gebeng, Pahang,” it said in a statement today.

PCG CEO, Mohd Yusri Mohamed Yusof said the addition of Perstorp Group marks a major milestone, which will see over 130 new product offerings, seven manufacturing sites globally and more than 1,500 new members coming into the PCG family.

“PCG has also established a new specialty chemicals division to manage and steer critical strategic priorities supporting the group’s long-term aspirations within this space,” he said.

PCG also said it has enhanced its commitment towards sustainability in 2022 and surpassed its short-term target to reduce its Scope 1 and Scope 2 GHG emissions by 100,000 tonnes of carbon dioxide equivalent (tCO2e) by 2024.

Through various efforts, such as process optimisation and catalyst upgrades, PCG has achieved a cumulative reduction of more than 108,000 tCO2e so far, it said.

In 2022, PCG recorded a production volume of 10.4 million tonnes/year, and a sales volume of 8.3 million tonnes/year while continuing with its track record on safety.

PCG closed 2022 with record revenue of RM29 billion and profit after tax of RM6.3 billion.

(PRA)

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