PT Indo-Rama Synthetics Tbk has entered into an agreement to acquire 50% shareholding in PT Polyprima Karyareksa.
Indo-Rama Corporate Secretary V.S. Baldwa said the acquisition is also subject to several conditions, including agreement from the government to support main business of the company.
Disclosure: No position at the stock mentioned above.
Polyprima Karyareksa is a producer of purified terephthalic acid (PTA) in Cilegon, West Java. Its PTA product is used in textile and packaging industries, including the application of PET resins in plastic films, tire cord, engineering plastics, and plastic bottle for carbonated softdrink and mineral water. The company was founded in 1997 and is based in Jakarta, Indonesia.
Polyprima has an installed capacity of 465,000 metric tons per annum. The technology used is that of Invista. Polyprima is currently under a debt restructuring process. After the debt restructuring with creditors and issue of new capital by Polyprima, Indo-Rama Ventures Public Company Limited's shareholding will be reduced to 41% in Polyprima. Indo-Rama will hold another 41% and the balance 18% by others.
The restructuring and approval process is expected to be completed by Q4, 2011. Indo-Rama is a Group Company of SP Lohia and Amit Lohia, Non-Executive directors of Indorama Ventures having an annual polymer capacity of 290,000 metric tons.
Currently, the plant is not operating and is expected to start commercial production in Q2, 2012 on completion of required maintenance, revamping and capacity de-bottlenecking. On de-bottlenecking the capacity will increase to 500,000 metric tons per annum.
Indonesia is growing to become one of the large polyester markets and has a shortage of PTA supply. Indorama Ventures through its equity stake in Polyprima will secure the PTA supplies for its Polyester plants in Indonesia. The polymer capacity of Indorama Ventures in Indonesia after the Greenfield project in Q1 2013 will be approx 460,000 metric tons per annum.
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