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etrochemical giant PT Chandra Asri Petrochemical (CAP) is targeting a revenue increase of at least 30 percent next year as it expects a production boost after overhauling and expanding its naphtha cracker.

The publicly listed company would spend US$380 million for the maintenance and expansion of its naphtha cracker to increase production capacity by around 43 percent, said CAP director and corporate secretary Suryandi.

'€œWe will start the overhaul in late August to late October this year. We will also integrate new facilities [of naphtha cracker] with our existing facilities,'€ he told The Jakarta Post.

The overhaul would decrease the firm'€™s production capacity by between 20 percent and 25 percent this year, but that would soon be compensated with higher capacity next year onward, he said.

Suryandi refused to disclose his firm'€™s sales target for this year, but said that CAP would continue to maintain its 4.7 percent profit margin recorded in the first quarter of this year to the end of the year.

'€œWe expect to maintain our profit margin throughout the quarters of this year amid the continuing oil price drop,'€ he said.

The price of oil price affects prices of various derivative oil products, including naphtha, which is used as petrochemical feedstock.

CAP, which is listed on the Indonesia Stock Exchange (IDX) under the code TPIA, saw its net revenues plunge by 44.2 percent to $357.93 million in the January-March period this year from $641.73 million in the same period last year.

The company, however, saw its net profit surge to $2.69 million from $502,000.

Suryandi said he was upbeat that his firm would remain in the black next year, particularly with a possible revenue boost from its naphtha cracker'€™s overhaul.

Once the overhaul is complete, its annual production of ethylene and propylene is expected to increase by up to 860,000 tons and 470,000 tons, respectively, from 600,000 tons and 320,000 at present.

Ethylene and propylene are used to produce polyethylene and polypropylene, which both are commonly used for water pipes, food-grade bottles, non-woven bags, furniture, automotive and electronic parts.

With the higher production capacity, CAP will be able to help reduce the country'€™s importation of petrochemical products

Suryandi said that his firm'€™s polyethylene and polypropylene '€”which were fully marketed for the domestic market '€” could not yet meet growing local demand, which currently stood at around 3 million tons a year.

'€œDemand for petrochemical products [including polyethylene and polypropylene] usually increases by between 6 percent and 7 percent a year,'€ he said.

Besides expanding its naphtha cracker, CAP will kick off the establishment of a synthetic rubber plant by end of this year with an estimated investment of around $435 million.

The establishment of the plant will be under PT Synthetic Rubber Indonesia, a joint venture between CAP and French tire maker Compagnie Financière du Groupe Michelin.

The firm will also partner with oil and gas firm British Petroleum (BP) Singapore Pte Ltd. to develop a condensate splitter to produce naphtha.

'€œWe currently import 100 percent of our naphtha. We hope to reduce the amount of imports by 60 percent with the condensate splitter,'€ Suryandi said, adding that the splitter was set to operate in 2019.

CAP, which is part of diversified listed company PT Barito Pacific '€” owned by local tycoon Prajogo Pangestu '€” is Indonesia'€™s largest integrated petrochemical company producing olefins and polyolefins and the sole domestic producer of styrene monomer and butadiene '€“ usually used to produce synthetic rubber and plastics.