JAKARTA (TheInsiderStories) – PT Chandra Asri Petrochemical Tbk (IDX: TPIA), a chemical producer based in Indonesia, has allocated capital expenditure (capex) US$294 million in 2020, said the management on Tuesday (09/24). The funds will be used for business expansion.
Director Chandra Asri Suryandi explained, the company will use the internal cash to meet the capex. He said, the company still had cash of around $649 million as first half (1H) of 2019.
Currently, he continued, the manufacturer develop two factories and expect complete the construction in the third quarter of 2020. The new factories are Methyl-butyl ether and Butene-1 which were built with an investment of $130.5 million.
The methyl-butyl ether plant has a capacity of 127,000 tons per year. While the Butene-1 plant will have a capacity of 43,000 tons per year. These new factories will absorb Raffinate-1 to be used as raw material.
In October of this year, Chandra Asri will also complete the construction of a polyethylene and polypropylene factory. With the operation of these two new factories, the company’ production capacity could increase to 4.2 million tons from the current 3.9 million tons.
After operate four new factories in this year, Suryandi revealed, the company will also complete the construction of the CAP 2 factory in June 2024. The unit of PT Barito Pacific Timber Tbk (IDX: BRPT) will allocate around $5 billion to build the factory. The company is looking strategic investors to build the plants.
“After CAP 2 is operational, our production capacity can increase to 8 million tons,” said the director.
Last July, Chandra Asri has successfully launched a three-year bond issuance with total amount of Rp750 billion (US$53.19 million). The notes has a coupon 9.5 percent rate.
According to the president director Erwin Ciputra, the proceeds from the bond will be used to finance its Methyl-butyl ether and Butene-1 plant projects. The stepped taken to further expand the petrochemical producer’ revenue streams and extend its leading position within the ever-growing Indonesian petrochemical industry.
Chandra Asri‘ continued success in tapping the domestic fixed income market, as part of the company’ shelf offering program approved by the Financial Services Authority with an amount Rp2 trillion target. He added the bond was rated idAA- rating from Pefindo.
Until 1H-2019, the company posted a net profit of $33.3 million, decreased by 71.1 percent from the same period the previous year. Along with the decline in net profit, the manufacturer revenue also dropped 18.1 percent on an annual basis, from $1.28 billion in the first half of 2018 to $1.05 billion in the first half of 2019.
As we know, CAP, a subsidiary of Barito Pacific as the majority shareholders, is Indonesia’s largest integrated petrochemical company producing olefins and polyolefins. The company factories located in Cilegon and Serang, Banten Province.
The company is the only producer who operates a naphtha cracker and is the sole domestic producer of ethylene, styrene monomer and butadiene. In addition, CAPC is also the largest polypropylene producer in Indonesia, including produces plastic raw materials and chemicals used for packaging products, pipes, automotive, electronics, others.
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