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

4.3% for the 1st quarter 2006.
Inflation rate (year on year) decreased
from 17% to 15.74%. Targeted at 8-9%, yr 2006
Stronger Rupiah against US$ at level from Rp
9700 to Rp.8750,-.at beginning May (highest
increased compare to other Asia exchange
rate). Now is getting stabilized to Rp.9300,-.
Foreign Investment realization is increased at 1st
quarter compare last year.

Year

2006

GDP %

6.2

Inflation %

Exc.Rate
Rp

Population
(Million)

2007F

2008F

2009F

7.2

7.6

7.0

9700

9000

8500

8500

230

235

239

242

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

Oil-reserved
4.4 Billion Bpd
13th World oil producer

Naphtha
Condensate

Natural

Gas Coal

Palm

Oil &

Starch

Gas reserved
90.3 Trillion c.f.

Coal reserved
5.3 Billion ton

1st Asia largest reserves

4th Asia largest reserves

40% of total world production

Ethane
Methane
Propane

Coal to olefin
Dow JV w/ China

Biodiesel based
Ethanol

largest coal producer

Japanese Co. interested to

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)

Thailand
1%
Papua New Guinea
1%
Malaysia
8%

Vietnam
5%

Other Asia Pacific

2%
Australia
9%
Brunei
2%

Indonesia
9%
India
12%

China
51%

OPEC OIL PRODUCERS 30.1 Mil Bpd (2004)

S.Arabia1

9,101

Iran

4,001

Venezuela

2,557

Nigeria

2,509

U.A.Emirates

2,478

Kuw ait1

2,376

Iraq

2,011

Algeria

1,677

Libya
Indonesia
Qatar

Bpd

1,515
1,095
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

LPG
(1.4%)
Naphtha (25.6%)
Kerosene (10.6%)
Gas Oil
(21.2%)
Fuel Oil (41.2%)

1996

Australia
India
Thailand

1997

1998

1999

Brunei
Indonesia
Vietnam

2000

2001

2002

2003

China
Malaysia
Other Asia Pacific

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Industry Development

1.
2.
3.
4.
5.

1975 -1985

1986 -1996

Beginning

1st wave development

Statomer (PVC)
Eastern Polymer (PVC)
Asahimas (PVC)
PIPI (PS)
Polychemlindo
(EPS,HIPS)
Pertamina (PP)

6.

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.

CAPC (Olefin Center)

Bakrie Kasei (PET)
PENI (PE).
Polytama (PP)
Polypet (PET)
Risyad Brasali
Satomo Indovyl (PVC)
Siam Maspion (PVC)
Styrene Monomer Ind.
Tri Polyta (PP)
GT.Petrochem (EG)

1997-2000

2001-2005

Indonesian
Economic
Crisis

Indonesian
Economic
Market
Recovery

(No Development)

Year 2006-2015
Towards the 2nd Wave Petrochemicals-Olefin Development
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2nd Wave Petrochemical Development

The Philosophy & Directions ;

Domestic Resources
(local resource)

Natural Source Oil & Gas, Coal

Feedstock Petrochemical

Integrated Industry (upstreammid downstream, in one area

complex)

Monomer Industry

Competitive
(world scale economic & service)

Polymer Industry

Alliances
(financial, technology, skill)

Increase added value chain to

downwards industry
(create jobs, national income)

Down Stream Fabricators

Finished Products

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.

Pertaminas 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

Feedstock

UPSTREAM

MIDSTREAM

1.NAPTHA
2.CONDENSATE
3.Gas

Ethylene
Propylene

Involving 122 thousand employee.

Source Indag.

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PE
PP

Olefin
Cracker

(Ethane/Methane
/Propane

DOWNSTREAM

EDC/VCM

PVC

SM

PS

Plastic processing
film, sheet, plastic
bags, bottles,
house ware,
toiletries, toys.
Auto mobile parts,
Appliances,
Electronic, goods
& component
Synthetic Textile
Synthetic Rubber
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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)

SUNDA STRAITS

Risjad Brasali EPS (15,000

MTY),
SAN
(15,000 MTY),
ABS (20,000 MTY)

Bojonegoro

P.Panjang

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)
NaOH (Dry) (285,000 MTY)
CL2
( 22,000 MTY)
EDC
( 80,000 MTY)
VCM
(400,000 MTY)
PVC
(285,000 MTY)
HCL
( 42,000 MTY)

Lautan OtsukaHydrazin Hydrate (4,000 MTY)

DongjinHydrazin Hydrate (7,000 MTY)
Tri PolytaPP (350,000 MTY)
Sriwie

Anyer

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Rhom & Hass

Siemens KS

Air Liquid

Cilegon

Hoechst

KS Port

Banten Port
ARCO PPG (25,000 MTY)
PolyprimaPTA (400,000 MTY)
Polypet PET (100,000 MTY)
Asahimas

TOLL ROAD '95

UAP
Cabot

KS Road '95

NTA
Acrylic Acid
(60,000 MTY)
Ethyl Acrylate
(20,000 MTY)
N-Bthyl Acrylate
(40,000 MTY)
2-Ethylhexyl Acrylate (40,000 MTY)

Chandra Asri

Ethylene
Propylene
Py- Gas
Crude C4
HDPE
LLDPE

(520,000 MTY)
(276,000 MTY)
(210,000 MTY)
(200,000 MTY)
( 100,000 MTY)
( 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
EB
10%

Propylene

PP.CO
0%

IPA
2%

HDPE
21%

Cumene
6%

Others
6%

Propylene Oxide
7%

EDC
27%

Oxo Alcohol
8%

LLDPE
29%
EO
13%
LL/HDPE
EB
EDC
EO

= PT. Chandra Asri & PT.Titan

= PT. SMI
= PT. Asahimas & PT.Sulfindo,
= PT . GT Petrochem

Polypropylene
62%
Acrylontrile
9%

PP
Oxo
Acrylonitrile

= PT.Tri polyta, PT.Polytama & PT.Pertamina

= PT. PON
= PT. Nippon Shokubai

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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
largest net importer of
700-800KT for ethylene
in Asia.
Chandra Asri w/ its
expansion to 590Kt in
2007 is the only olefin
cracker.

KT

Demand

Supply

Total 1327 KT
1400
SULFINDO
1200
ASAHIMAS
1000
GT PETCHEM
800

SMI

Total 520 KT

600
PENI/TITAN

Expected new cracker of

2x 700Kt should be on
stream in year 20102011.

400
200

CHANDRA ASRI
CHANDRA ASRI

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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)

2000

Supply (Production)
Indonesia C2 Demand

1500

2 New additional crackers

should be onstream in yr
2010-2011.

AAGR 7.3%
(yr 2005-2015)

1000
500
0
-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

on Propylene spot
market of about 240-280
KT p.a.
Chandra Asri w/ its
expansion to 310Kt in
2007.
Expected new cracker of
400Kt propylene should
be on stream in year
2010.

1000
900
800
700
600
500
400
300
200
100

717 KT
PERTAM INA
PON
POLYTAM A

510 KT
PLAJU

NIPPON

PERTAM INA
EXXOR 1

TRI POLYTA

CHANDRA
ASRI

Demand

Supply

0
KT

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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

Net Imports
Supply

1400
1200

PROPYLENE

Demand

1000

AAGR 6.1% (yr. 2006-2015)

800

New Capacity should be

onstream in yr 2010-2011

600
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
300Kte

TITAN
(PENI)

450Kte

Siam Maspion
120Kte
Statomer
88Kte
SULFINDO
(Satomo)
80Kte
ASAHIMAS
285Kte

PE

PVC

Pertamina
45Kte

Polytama
200Kte

393Kte

87Kte
35Kte
Polychemlindo

DOW
52Kte

Arbei
15Kte
Arbei
20Kte

PS

ABS/SAN

35Kte

Tripolyta
380Kte
PP

Petnesia
85Kte
SK Chem
86Kte
Mitsubishi
52Kte
Indorama
80Kte
POLYPET
90Kte
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.
Forecast HD/LL/LD (Y 2006-2015)
AAGR 6.8%

Kte

New capacity
onstream 400Kt
LD/HD

1350
1150
950
750
550
350
150
-50
2000

2001

2002

2003

2004

LL

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2005

2006

HD

2007

LD

2008

2009

Cap

2010

2011

2012

Add.Cap

2013

2014

2015

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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.
Additonal capacity of
600Kt should be add

1600
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

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Cap

Add.Cap

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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
in yr 2012-13

800
700
600

KT

500
400
300
200
100
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Export

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Dom.Demand

Cap

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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
yr 2010-11

200

KT

150
100
50
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

PS

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Cap

Add.Cap

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PET

TOTAL DOMESTIC CAPACITY 385,000 MTPA (2005)

80,000

50,000

Patnesia
Resindo

Indonesia per capita consumption of

PET resin is only 0.21 kg, compare
to other developed country such
Australia 4.8kg and Japan 6.6kg
percapita.
Total Indonesia PET bottle grade
demand is 50,000 Mt p.a (2005).
Average growth would be at 8.1%
2006-2015

90,000

85,000

80,000

Indorama

Polypet Karya

Mitsubishi
Chemical

SK Chemical

Indonesia PET Bottle Growth (Kte)

Yr.2004-2015
108
CAGR.8.1%
yr. 2006-2015

Kte

Indonesian PET capacity is presently

served by 5 domestic producers w/
total capacity 385KT p.a. and serve
around 100% local market with no
import of PET bottle grade into
Indonesia (yr. 2004/05).

41

45

50

51

54

60

67

68

74

81

89

98

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 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 )

Thank You
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