ASEAN KEY DESTINATIONS
Thai polyester producer plans new Indo investment
Thailand-based polyester producer Indorama Ventures plans to invest as much as $5.2 billion in the energy sector and establish a new factory in Indonesia, its chief executive said on Monday.
“We want to make a new investment in Indonesia. We’re looking at possibilities in coal gasification, oil and gas,” Sri Prakash Lohia, chairman of Indorama Ventures, said after a meeting with President Susilo Bambang Yudhoyono in Jakarta.
He added that the proposed investment signified his company’s efforts to expand and diversify its business in Indonesia.
The chairman said $2 billion of the investment would go toward oil and gas exploration and petrochemicals, and $1 billion would be used to build a coal gasification facility to supply power for its existing factories. Indorama also plans to build a $200 million polyester factory in Purwakarta, West Java, as part of its existing investment in the country.
The gasification unit would be built in Sumatra because of its large coal reserves, Lohia said. He refused to disclose details on the oil and gas exploration, saying the proposal was still being discussed with the government.
Indorama is seeking a tax allowance and tax holiday for its investment in Indonesia, Lohia said. However, Gita Wirjawan, the head of the Investment Coordinating Board (BKPM), said the government would only consider a tax allowance.
Hatta Rajasa, coordinating minister for the economy, said the government welcomed the plan. He suggested the company put the gasification unit in South Sumatra, which he said had 50 percent of Indonesia’s coal reserves.
According to Energy Ministry data, South Sumatra has 47 billion tons of coal reserves. Efforts to boost the province’s coal production, which is about 12 million tons annually, have been hampered by a lack of transportation.
The government is desperate for fresh investment, especially the oil and gas sector, as it tries to meet its target of 6.5 percent economic growth this year. The country’s economy grew 6.1 percent last year.
Indorama Group invests in Indonesia through Indorama Synthetics. In addition to producing polyester fiber and filaments, the company also generates 60 megawatts of power annually, according to its web site.
Shares of Indorama Synthetics fell 2.06 percent to Rp 2,375 at Monday’s close of the Indonesia Stock Exchange. The company employs 70,000 Indonesians, and the government hopes that Indorama’s new investment will create more jobs.
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