Indonesian Olefin & Polyolefin industry

Outlook 2006-2015
“ Into the second wave of olefin petrochemicals development”
8th Olefin & Polyolefin Asia Markets,
Singapore 7-8 June 2006

Prepared by Donny Syarief

Indonesian Olefin & Plastic Industry Association (INAplas)

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 Contents
• Industry Background

• Indonesian economic & industry Development

- Economic outlook
- Natural resource & industry development

• Indonesian olefin & polyolefin Highlights

- Olefin-Upstream updates
- Polyolefin-Midstream updates

• Indonesian Olefin & Polyolefin Supply & Demand

- Olefin products (Ethylene-Propylene and its derivatives)
- Polyolefin products (PE,PP,PVC,PS,PET)

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 Background
• Indonesian petrochemical development has started in year 1976, which PVC as
first resin manufacture and followed by Styrene/PS, PP, PE and olefin center in
the year 1986 to1996.
• The return of Indonesian market demand to the pre crisis level after shrinkage by
35-40% due to economic recession in 1998.
• Low plastic consumption per capita 9,5 Kg VS Malaysia 26 Kg, Thailand 30 Kg,
Singapore 45 Kg, Japan 80 Kg has become a potential to grow.
• As 4th world largest population (230 Million), Indonesia has long solid growth of
plastic consumption since 1970 which used in daily life such as packaging, house
ware, electronics product, automotive, stationeries, toys, building equipments, etc.
• Most of big players from upstream, midstream and downstream focus to Indonesia
due to big market and investment opportunity.

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 Indonesian Economic & Industry
Development

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 Indonesian Economic
1st Positive Quarter 2006.
• Economic growth increase 4,58% from targeted Year 2006 2007F 2008F 2009F
4.3% for the 1st quarter 2006.
GDP % 6.2 7.2 7.6 7.0
• Inflation rate (year on year) decreased
from 17% to 15.74%. Targeted at 8-9%, yr 2006 Inflation % 8 8 7 8

• Stronger Rupiah against US$ at level from Rp Exc.Rate

9700 to Rp.8750,-.at beginning May (highest 9700 9000 8500 8500
increased compare to other Asia exchange Rp
rate). Now is getting stabilized to Rp.9300,-. Population
230 235 239 242
• Foreign Investment realization is increased at 1st (Million)
quarter compare last year.
Source BI, BPS

Overall, the economic performance and business climates in Indonesia has showed tremendous
improvements at first quarter 2006. The government expected economic growth at 6.2% ,with inflation rate
below 10% in year 2006.

How is the position of Indonesian Natural Resources as

feedstock for petrochemicals industry…??
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 Potential Natural Resources
as feedstock for petrochemical industry..

• Crude Oil • Natural Gas • Coal • Palm Oil &

Oil-reserved Gas reserved Coal reserved Starch
4.4 Billion Bpd 90.3 Trillion c.f. 5.3 Billion ton
13th World oil producer 1st Asia largest reserves 4th Asia largest reserves 40% of total world production

Naphtha Ethane Coal to olefin Biodiesel based

Condensate Methane Dow JV w/ China Ethanol
Japanese Co. interested to
Propane largest coal producer invest w/ this sources

Source World energy council

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13th World largest oil producer
ASIAN OIL RESERVED 47.7 Billion Bpd (2003) OPEC OIL PRODUCERS 30.1 Mil Bpd (2004)

Other Asia Pacific

Thailand Vietnam S.Arabia1
2% 9,101
1% 5% Australia
Papua New Guinea 9% Iran Bpd
4,001
1% Brunei
Malaysia 2% Venezuela 2,557
8% Nigeria 2,509

Indonesia U.A.Emirates 2,478

9%
Kuw ait1 2,376

India China Iraq 2,011

12% 51% Algeria 1,677

Libya 1,515

Indonesia 1,095

Qatar 818

Indonesia oil reserved has 4.4 Billion Barrel Per day

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2nd Asian Largest Oil Producer

2nd Largest ASIAN OIL PRODUCTION (Million Bpd)

3500
3396
3000

2500

2000

1500
1179
1000

500

0
1995 1996 1997 1998 1999 2000 2001 2002 2003

LPG (1.4%) Australia Brunei China

Naphtha (25.6%) India Indonesia Malaysia
Kerosene (10.6%) Thailand Vietnam Other Asia Pacific
Gas Oil (21.2%)
Fuel Oil (41.2%)

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Industry Development
1975 -1985 1986 -1996

Beginning 1st wave development 1997-2000 2001-2005

1. CAPC (Olefin Center)
2. Bakrie Kasei (PET)
3. PENI (PE). Indonesian Indonesian
1. Statomer (PVC)
4. Polytama (PP) Economic Economic
2. Eastern Polymer (PVC)
5. Polypet (PET) Crisis Market
3. Asahimas (PVC)
6. Risyad Brasali
4. PIPI (PS) (No Development) Recovery
7. Satomo Indovyl (PVC)
5. Polychemlindo
8. Siam Maspion (PVC)
(EPS,HIPS)
9. Styrene Monomer Ind.
6. Pertamina (PP)
10. Tri Polyta (PP)
11. GT.Petrochem (EG)

Year 2006-2015
Towards the 2nd Wave Petrochemicals-Olefin Development
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2nd Wave Petrochemical Development
The Philosophy & Directions ; Natural Source Oil & Gas, Coal

• Domestic Resources
(local resource) Feedstock Petrochemical

• Integrated Industry (upstream-

mid downstream, in one area Monomer Industry
complex)

• Competitive Polymer Industry

(world scale economic & service)

• Alliances Down Stream Fabricators

(financial, technology, skill)

• Increase added value chain to Finished Products

downwards industry
(create jobs, national income)
Consumers
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 Indonesian Olefin & Polyolefin
Highlights

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Olefin Highlights
• The entries of Singaporean and Malaysian petrochemical players as strategic investors
into Indonesian Olefin and Polyolefin largest producers are sign of attractiveness of
Indonesian market and investment opportunities.

• Chandra Asri project expansion Ethylene capacity 520 kte to 590 kte and Propylene
capacity 280 to 310 Kte and will be commissioned in mid 2007.

• Pertamina’s debottlenecking for propylene capacity 200 to 230Kte, commissioned in

year 2007 and additional expansion for 180kte in year 2007/08.

• Trans Pacific Petrochemical Indotama (TPPI) has completed for its first phase
aromatic complex to produce 1.1 million ton Naphta p.a. and 1 Million ton for aromatic
products, for the next 2 and 3 phase are refinery and olefin projects. TPPI complex is
located in Tuban East Java.

• Exxon-Mobil Cepu refinary will benefit domestic petrochemicals, first production is

expected in 2009/2010.

• Gas revised regulations decree 22/2001, proposed from maximum 25 % allocated to

domestic demand, to minimum 25 % allocated to domestic needs.
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Polyolefin Highlights
• The acquisition of PT.PENI, the largest Indonesian Polyethylene producer
by Titan chemicals has become one of the largest polyethylene producer in
Asia with total capacity of nearly 1 million ton per annum.

• PT. Polytama increased its current polypropylene capacity from 200 to 230
kte per annum. Polytama has propylene supply from Pertamina which is
located in one complex area in Balongan, East Java.

• Indonesian second largest integrated EDC,VCM and PVC maker Satomo

Indovyl Monomer and Polymer has now running after two years shutdown,
under PT. Sulfindo Adiusaha, the polymer capacity at 80 Kte.

• Indonesia ABS maker PT. Arbei Styrindo Indonesia, now has changed the
ownership to DM Makulus 92% and Risyad 8%. PT. Arbei Styrindo
formerly is owned by Risyad Brasali group, with capacity of 35 Kte per
year.

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 Petrochemical Olefin-Plastic Industry Three

UPSTREAM MIDSTREAM DOWNSTREAM

Feedstock
1.NAPTHA
2.CONDENSATE Olefin PE Plastic processing
Cracker PP film, sheet, plastic
3.Gas
bags, bottles,
(Ethane/Methane
/Propane house ware,
EDC/VCM PVC
Ethylene toiletries, toys.
Propylene
SM PS Auto mobile parts,
Appliances,
Electronic, goods
& component
Synthetic Textile
Involving 122 thousand employee. Synthetic Rubber

Source Indag.
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Anyer- Merak- Cilegon Area
Rhone PoulencSBL (30,000 MTY)
Satomo Monomer
EDC (265,000 MTY)
VCM (400,000 MTY)
Satomo Polymer
PVC (105,000 MTY)
Showa Esterindo
Ethyl Acetate (50,000 MTY)

P.Panjang
Risjad Brasali EPS (15,000
MTY), SAN
SUNDA STRAITS Bojonegoro
(15,000 MTY),
ABS (20,000 MTY)

Anyer-Merak
P. Merak
Buana Sulfindo

Prointail
Unggul IndahAB (210,000 MTY)
P. Sanghiang DOWPS (48,000 MTY), SBL (30,000 MTY)
Bakrie KaseiPTA (500,000 MTY)

PENI PE (450,000 MTY)

AMOCO MitsuiPTA (350,000 MTY) UAP TOLL ROAD '95

Cabot Rhom & Hass
NaOH (Dry) (285,000 MTY)
CL2 ( 22,000 MTY) Siemens KS Air Liquid
EDC ( 80,000 MTY)
VCM (400,000 MTY) KS Port Hoechst Cilegon
PVC (285,000 MTY)
HCL ( 42,000 MTY) Banten Port KS Road '95
ARCO PPG (25,000 MTY)
PolyprimaPTA (400,000 MTY)
Polypet PET (100,000 MTY) NTA
Asahimas Acrylic Acid (60,000 MTY)
Lautan OtsukaHydrazin Hydrate (4,000 MTY) Ethyl Acrylate (20,000 MTY)
N-Bthyl Acrylate (40,000 MTY)
DongjinHydrazin Hydrate (7,000 MTY) 2-Ethylhexyl Acrylate (40,000 MTY)
Tri PolytaPP (350,000 MTY)
Ethylene (520,000 MTY)
Sriwie Propylene (276,000 MTY)
Chandra Asri
Py- Gas (210,000 MTY)
Crude C4 (200,000 MTY)
Anyer HDPE ( 100,000 MTY)
LLDPE ( 200,000 MTY)
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 Olefin Supply & Demand

• Ethylene
and its derivatives

• Propylene
and its derivative
Olefins
A group of chemicals characterized by their straight or branched structure.
Includes ethylene, (as largest volume petrochemical),propylene and butadiene.

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C2 & C3 Derivatives Consumption
Ethylene Propylene
PP.CO
IPA Others
EB 0% 2% 6%
Cumene
10% HDPE 6%
21%
Propylene Oxide
7%
EDC
27%
Oxo Alcohol
8%
Polypropylene
LLDPE 62%
29% Acrylontrile
EO 9%
13%
LL/HDPE = PT. Chandra Asri & PT.Titan
PP = PT.Tri polyta, PT.Polytama & PT.Pertamina
EB = PT. SMI
Oxo = PT. PON
EDC = PT. Asahimas & PT.Sulfindo,
Acrylonitrile = PT. Nippon Shokubai
EO = PT . GT Petrochem

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 Ethylene Demand VS Capacity
Current total C2 Capacity 520 Ktpa
Current total derivative demand is 1,327Ktpa (assume running at 97%)

• Indonesia is become
KT Demand Supply
largest net importer of
Total 1327 KT
700-800KT for ethylene 1400
SULFINDO
in Asia. 1200
ASAHIMAS
• Chandra Asri w/ its 1000
GT PETCHEM
expansion to 590Kt in
800 SMI
2007 is the only olefin Total 520 KT

cracker. 600
PENI/TITAN
400
• Expected new cracker of
CHANDRA ASRI
2x 700Kt should be on 200
CHANDRA ASRI
stream in year 2010- 0
2011.
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Ethylene Projection to 2015
Indonesia would be of C2 net importer of 700-800KT p.a. up to year 2010, in
order to balance the demand at 1500KT, 2 x 700KT capacity of new cracker
should be on stream in year 2010-2011.

2500 Net Imports (up to 2010)

Supply (Production) 2 New additional crackers
2000 should be onstream in yr
Indonesia C2 Demand 2010-2011.
1500
AAGR 7.3%
1000
(yr 2005-2015)

500

-500

-1000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

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 Propylene Demand VS Capacity
Current total C3 Capacity 510 KT p.a.
Current total derivative demand is 717KT p.a. (assume running above 90%)

• Indonesia are depending 1000

on Propylene spot 900 717 KT
market of about 240-280 800
KT p.a. 700
PERTAM INA
PON 510 KT
• Chandra Asri w/ its 600
500 POLYTAM A
expansion to 310Kt in PLAJU
400 PERTAM INA
2007. NIPPON
EXXOR 1
300
• Expected new cracker of
200 TRI POLYTA CHANDRA
400Kt propylene should
100 ASRI
be on stream in year
0
2010. KT Demand Supply

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Propylene Projection to 2015
Indonesia is depending on the Propylene spot market of 240kte-280Kte p.a. until yr
2009. To balance the demand of 1100KT, new additional capacity of 2x 300KT should
be on stream in year 2010-2011.
1600

1400
Net Imports
Supply PROPYLENE
1200
Demand
1000

800 AAGR 6.1% (yr. 2006-2015)

New Capacity should be
600 onstream in yr 2010-2011
400

200

0
(200)

(400)

(600)
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

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 Polyolefin
• Polyethylene
• Polypropylene
• Polyvinyl Chloride
• Polystyrene
• Others (PET,ABS)

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Polyolefin Capacity 2006
750Kte
Total 2,536 Kte
646Kte
625Kte
Eastern 48Kte
CAPC Pertamina 393Kte
300Kte Siam Maspion 45Kte
120Kte Petnesia
Statomer 85Kte
TITAN 88Kte Polytama 87Kte SK Chem
(PENI) SULFINDO 200Kte 35Kte 86Kte
450Kte (Satomo) Polychemlindo Mitsubishi
80Kte 35Kte Arbei 52Kte
15Kte Indorama
ASAHIMAS DOW Arbei 80Kte
285Kte Tripolyta 52Kte 20Kte POLYPET
380Kte 90Kte

PE PVC PP PS ABS/SAN PET

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 PE (HDPE/LL/LD)
• Indonesia has two polyethylene producers PT.Chandra Asri & PT.Titan with total
nameplate capacity for LL& HDPE is 750,000Mtpa.
• PE domestic demand presently is about 620-680,Mtpa include LDPE, by annual average
growth forecast is 6.8%, demand would be reached over 1Million MT in year 2012-13.
• To balance supply & demand growth, new capacity should be add between 2010-2011.

Kte Forecast HD/LL/LD (Y 2006-2015) New capacity

AAGR 6.8% onstream 400Kt
1350
LD/HD
1150
950
750
550
350
150
-50
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

LL HD LD Cap Add.Cap 24
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 PP
• Indonesia has three polypropylene producers PT.Tri polyta, PT.Polytama &
PT.Pertamina with nameplate capacity for is 625,000Mtpa.
• PP domestic demand presently is about 800-840,Mtpa by annual average growth
forecast is 6.5%, demand would be reached 1.4 Million MT in year 2014-15.
• To balance supply & demand growth, new capacity of about 600KT p.a. should be added
in yr 2010-2011.

1600 Additonal capacity of

600Kt should be add
1400
1200

1000 Forecast HD/LL/LD (Y 2006-2015)

AAGR 6.5 %
800

600
400

200
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

PP Cap Add.Cap 25
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 PVC
• Indonesia has five PVC producers PT.Eastern, PT.Siam maspion, PT.Statomer, PT.Sulfindo
and PT.Asahimas Chemical with total nameplate capacity is about 650,000Mt.p.a.
• PVC domestic demand presently is about 300-320,000Mt p.a. forecast growth is 5-6%, and
50% excess from domestic supply is for export market.
• To balance supply & demand growth, plant expansion of 70-80Kt should be added in yr
2011-2012.
Plant expansion needed
800 in yr 2012-13
700
600
500
KT

400
300
200
100
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Export Dom.Demand Cap 26

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PS
• Indonesia has two polystyrene producers PT.Dow Chemical and PT.Polychemindo with total
nameplate capacity for is 87,000Mtpa.
• PS domestic demand presently is about 110-120 Mtpa by annual average growth forecast is
6.5%, demand would be reached over 200,000 MT in year 2015.
• To balance supply & demand growth, new capacity of about 200KT p.a. should be add in
year 2010-2011.

250 Additional capacity

should be added in
200 yr 2010-11

150
KT

100

50

0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

PS Cap Add.Cap 27
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 PET
• Indonesian PET capacity is presently TOTAL DOMESTIC CAPACITY 385,000 MTPA (2005)

served by 5 domestic producers w/

90,000
total capacity 385KT p.a. and serve 80,000
85,000
80,000

around 100% local market with no

50,000
import of PET bottle grade into
Indonesia (yr. 2004/05).

Patnesia Indorama Polypet Karya Mitsubishi SK Chemical

• Indonesia per capita consumption of Resindo Chemical
PET resin is only 0.21 kg, compare
Indonesia PET Bottle Growth (Kte)
to other developed country such Yr.2004-2015
Australia 4.8kg and Japan 6.6kg 108
98
percapita. CAGR.8.1% 81
89
Kte
yr. 2006-2015 74
67 68
60
50 51 54
45
• Total Indonesia PET bottle grade 41

demand is 50,000 Mt p.a (2005).

Average growth would be at 8.1% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
2006-2015

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 Closing
Abundant of natural resources, low consumption per capita,
high economic growth and largest population as big market are the main
attractiveness for investment in Indonesia.

Indonesia Olefin & Plastic Industry Association Profile

• Established in yr 2000, a merger of 7 associations up stream, mid and down stream

• ± 142 active members, Investment ± USD 6,5 Billion.
• Member of A F P I Asean Federation of Plastic Industries

- Indonesian Olefin & Plastic Industry Association (INAplas)

- Malaysian Plastic Manufacturers Association ( MPMA )
- Myanmar Plastic Industries Association ( MPIA )
- Philippines Plastics Industry Assn., Inc. ( PPIA )
- Singapore Plastic Industry Association ( SPIA )
- The Thai Plastic Industry Club ( PIC-FTI )
- Vietnam Plastics Association ( VPA )

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