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Titan Chemicals Corp. Bhd. To Acquire Pt Peni, Indonesia~s Largest Polyethylene Producer Through Its Subsidiary, Titan Petchem (M) Sdn Bhd

Petrochemical industry | 22 Dec 2005 IST | Polymerupdate.com
Titan Petchem (M) Sdn Bhd, a wholly-owned subsidiary of Titan Chemicals Corp. Bhd. has entered into a conditional sale and purchase agreement with Golden Park Limited - Indika Group to acquire 100% of the equity of Chemical Brothers Limited , 100 % equity owner of PT Petrokimia Nusantara Interindo ("PT PENI"). PT PENI, the largest Indonesian polyethylene producer, is the owner of a petrochemical complex in Cilegon, Banten Province, comprising 3 Linear Low Density Polyethylene ("LLDPE") / High Density Polyethylene ("HDPE") lines with a nameplate capacity of 450,000 MTA. The complex was built by British Petroleum ("BP") and the plant utilizes BP~s renowned Innovene Technology.

At the signing ceremony of the agreement graced by Indonesia Minister of Industry, Bapak Fahmi Idris, Malaysian Ambassador, Dato~ Zainal Abidin Mahamad Zain and Chairman of Indonesia Investment Coordinating Board, Bapak Muhammad Lutfi, Titan Chemicals~ Managing Director, Mr Donald M. Condon Jr. said, "The proposed acquisition is a significant milestone in our journey as a newly listed company, as it will open doors to a host of opportunities.

"Our current production capacity is sold out, our company is strong and we shift now to concentrating on profitable growth - the proposed acquisition of PT PENI is our first significant step in that effort. This acquisition will increase the polyolefins capacity of Titan Chemicals by close to 50% and make it the largest polyolefins producer in South East Asia.

"With a population of 242 million people, Indonesia has per capita polyolefins consumption of 6 kg/annum compared with 46 kg/annum in Malaysia, and 200 kg/annum in developed countries like the USA and Germany. The prospects for significant demand growth for polyethylene is therefore promising."

The proposed acquisition will provide Titan Chemicals with manufacturing capabilities and an opportunity to position itself in a large domestic market in a second ASEAN country outside of Malaysia.

It is expected that Titan Chemicals will replicate its business strategies which have been tested and proven in the Malaysian market. The Malaysian fabrication sector has quadrupled in scale since the inception of Titan Chemicals as a result of excellent product quality, reliability of supply, strong technical support and nurturing of the fabrication sector growth - a reflection of the symbiotic relationship between the downstream fabrication sector and the upstream petrochemicals industry.

The proposed acquisition is expected to improve Titan Chemicals~ operability and reduce its production costs . Further the proposed acquisition will reflect the objectives of the industrial complementation strategies between ASEAN countries.

By way of the proposed acquisition, Titan Chemicals will be able to offer integrated solutions to a non-integrated producer. Besides being able to supply ethylene feedstocks to PT PENI from its Pasir Gudang facility, Titan Chemicals also will be able via its procurement network to supply feedstock chemicals and catalysts to PT PENI. Titan Chemicals will also be able to extend to PT PENI, the services of its Malaysian and International Marketing Network and Plastics Technical Centre for Research & Development and the technical expertise of its Malaysian employees, many of whom have over a decade of experience in operating and maintaining petrochemical facilities.

For the nine months ended September this year, our revenue stands at close to USD 1 billion (RM3.4 billion) with earnings after tax of USD 90.5million (RM 342 million).

About Titan Chemicals Corp. Bhd

Titan Chemicals was the first, and is the largest, integrated olefins and polyolefins producer in Malaysia and is the second largest polyolefins producer in Southeast Asia. Titan Chemicals presently operates eight plants on two integrated sites in Pasir Gudang and Tanjung Langsat in Johor, which are connected by a 12-km network of pipelines.

Titan Chemicals operates two principal business units, namely polyolefins, and olefins and aromatics. It has annual olefins production capacity of over 1,000,000 metric tonnes, and polymer capacity of more than 900,000 metric tonnes. These products are fundamental to the production of many diverse consumer and industrial products including flexible and rigid packaging, fibers and automotive parts. In addition Titan Chemicals has an aromatics plant that produces 200,000 metric tonnes of benzene and toluene. Benzene is used to produce styrene, phenol and cyclohexane which are used in the production of nylon, plastics and rubber. Toluene is used as an octane enhancer in gasoline as a chemical feedstock for benzene and/or paraxylene production as a solvent in paints.
Note: This story has not been edited by The Polymerupdate Editorial team and is auto-generated from a syndicated feed.

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