Valued at approximately US$5 billion, the facility is expected to raise the company’s production capacity from the current 4.2 million tons a year to more than 8 million tons. Chandra Asri subsidiary PT Chandra Asri Perkasa (CAP 2) will develop the new complex.

“We will continue to increase [production] capacity and expand our market,” Chandra Asri human resources and corporate affairs director Suryandi said at the 2021 Capital Market Summit & Expo on Oct. 14.

Read also: Chandra Asri prepares new US$5 billion factory

Suryandi said the new facility was expected to save the government foreign exchange reserves of up to $2.3 billion per year by reducing imports of petrochemical products, considering that, as of today, 50 percent of domestic petrochemical products are shipped in from oversees.

The facility, he added, would produce petrochemical products including polyethylene and polypropylene, two of the company’s main products. 

The publicly listed company is in a partnership with Thai Oil Public Co Ltd (Thaioil), which operates the largest refinery in Thailand, as a strategic investor to support the development of the new facility. Thaioil has become one of Chandra Asri’s shareholders through a rights issue worth $1.1 billion, which was completed on Sept. 15.

Read also: Chandra Asri inks $1.7 billion deal over new petrochemical plant

After the successful rights issue and equity injection, Thaioil subsidiary PT TOP Investment Indonesia now holds a 15 percent stake in the company, making it one of Chandra Asri’s key major shareholders and sponsors alongside Barito Pacific and SCG Chemicals.

Funds for the construction of the new complex will come from the company's capital investment, Chandra Asri’s management said, as reported by CNBC Indonesia. If necessary, the company would use internal cash for remaining funding needs during the construction of the complex.

Chandra Asri expects 2021 revenue of $2.5 billion based on its improved performance in the first half of the year.

The company booked $1.26 billion in revenue in the January-June period, up 50.35 percent from the corresponding period of last year, thanks to rising prices of several products, including ethylene and polyethylene, and rising sales volumes.

Shares of Chandra Asri, listed on the Indonesia Stock Exchange under the ticker symbol TPIA, changed hands at Rp 7,200 on Monday morning and are down almost 23 percent since the start of the year.

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