Indonesia Petrochemicals Industry Update Quarter 3 2012

  • July 2012
  • -
  • Business Monitor International
  • -
  • 61 pages

However, we warn that declining oil production and a restricted refining base could undermine naphtha feedstock supplies.
Furthermore, this report also analyses many of the trends in the domestic and external industry s and the impact of these trends on investment decisions and the way producers manage risk. We also examine the continued potential for domestic consumption growth at a time when supply is unable to keep pace with demand.
Whereas a number of South East Asian economies are braced for a period of stagnation over the next few quarters, BMI anticipates that Indonesia will power ahead to register relatively robust growth. At the same time, a prolonged global economic downturn could affect the archipelago's ability to realise its full growth potential, but exposure is limited relative to the rest of the region. We note that the government’s urban development programmes, which include affordable housing and infrastructure, are unlikely to play a major role in petrochemicals consumption growth.
Global majors are increasingly paying attention to Indonesia. In particular, South Korea’s Honam Petrochemical Corporation is planning to invest up to US Dollar 5bn in a complex that would have a cracker with 1mn tonnes per year (tpa) ethylene and 550,000tpa propylene capacity. Saudi Aramco is also studying an integrated refining and petrochemicals project under which it would construct a 300,000 barrels per day (b/d) refinery; the proposed configuration of downstream units has yet to be disclosed.
Meanwhile, Thailand’s Siam Cement Group (SCG) and PT Barito Pacific hope to raise US Dollar 500mn to finance the expansion of their Chandra Asri Petrochemical joint venture (JV). Under the expansion ethylene capacity would be raised from 600,000tpa to 1mn tpa, a new 100,000tpa butadiene extraction facility would be built and PE capacity would rise by 220,000tpa to 540,000tpa.
Over the last quarter BMI has revised the following projections /views: - Kuwait Petroleum International (KPI) indicated in Q212 that it was examining a proposed 200,000-300,000b/d refining and integrated chemicals complex in Indonesia. The configuration of downstream units has not been announced and it is unlikely to come onstream before 2017.
- Having completed take over s in the purified tephthalic acid (PTA) and polyethylene terephthalate (PET) sector in Q212, Indorama Ventures is planning to invest in a new 300,000tpa plant to make polyester chips – due onstream in 2013 – in a bid to become a leading vertically integrated polyester value chain producer.
- In the Asia Pacific Petrochemicals Risk/Reward Ratings (RRRs) matrix, Indonesia is 10th out of 12 countries with 50.4 points, down 0.2 points on the previous quarter due to the deterioration in its country risk score. It sits 11.7 points behind India and 10.8 points ahead of the Philippines.

Table Of Contents

Executive Summary ....... 5
Industry SWOT Analysis ..... 7
Indonesia Petrochemical Industry Environment and Risk Analysis ........ 7
Indonesia Political Environment and Risk Analysis .. 8
Indonesia Economic Environment and Risk Analysis ......... 9
Indonesia Business Environment SWOT ........ 10
World Petrochemicals Overview ... 11
Petrochemicals Industry Overview ........ 11
Data : World Ethylene Production By Country, 2011 And 2016 (‘000 tonnes capacity) ..... 11
Financial Results ... 15
Data : Financial Results Of Major Petrochemicals Firms, 2011 .. 15
World Oil Products Price Outlook ...... 16
Data : BMI's Refined Products Projections, from 2010 to 2016 ....... 16
Emerging Asia Petrochemicals Overview ......... 26
Indonesia Industry Overview ... 32
Market Structure .... 33
Supply And Demand......... 34
Data : Indonesian Petrochemical Segment Capacity .. 34
Industry Trends And Developments. ....... 35
Developments......... 35
Upstream ..... 38
Data : Refineries In Indonesia ... 39
Petrochemicals Risk/ Reward Ratings ..... 40
Data : Asia Pacific Petrochemicals Risk/Reward Ratings . 40

Market Projection Scenario ... 43
Petrochemicals Outlook ... 43
Data : Indonesia’s Petrochemicals Segment, from 2009 to 2016 ...... 44

Macroeconomic Data ....... 46
Data : Indonesia - Economic Activity, from 2011 to 2016 ... 48
Company Profiles ......... 49
Chandra Asri (CACP) ...... 49
Mitsui Chemicals ... 50
Petrokimia Gresik (Petrogres) ... 51
Glossary Of Terms ....... 52
Data : Glossary Of Petrochemicals Terms .... 52
Demographic Outlook .. 53
Data : Indonesia's Population By Age Group, 1990-2020 ('000) . 54
Data : Indonesia's Population By Age Group, 1990-2020 (% of total) . 55
Data : Indonesia's Key Population Ratios, 1990-2020 ..... 56
Data : Indonesia's Rural And Urban Population, 1990-2020 ...... 56
BMI Methodology ......... 57
How We Generate Our Market Projections .... 57
Chemicals And Petrochemicals Market ....... 57
Cross Checks ......... 58

Environment Overview Ratings ... 58
Data : Petrochemicals Business Environment Indicators And Rationale ......... 59
Weighting ..... 60
Data : Weighting Of Indicators . 60

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