Pertamina, PTT Global Chemical sign JV firm prior to building petrochemical complex

JAKARTA (Rambu Energy) – Indonesia’s state own oil and gas company PT Pertamina (Persero) and Thailand’s PTT Global Chemical Public Company Limited (PTTGC) have signed marketing and trading-Joint venture agreements (Marketing & Trading JVA) to establish a joint venture company in Indonesia.

The JV Company is targeted to seize the Indonesian domestic petrochemical market prior to the plan of world scale petrochemical complex development that expected to start its operation in 2018.

Earlier, both parties have signed manufacturing joint venture–heads of agreement on Dec. 10, 2013, in Jakarta. Under the agreement, both parties have agreed for merging and expanding their polymer sales and distribution in Indonesia’s market.

Pertamina said in a joint-statement recently that the JVA will enable an establishment of joint venture company to serve a huge number of customers and to better accessing the market, prior to the incorporation of developing the petrochemical complex in Indonesia.

The joint venture agreement has already been signed and is subject to further regulatory approvals for the joint venture company incorporation within the first quarter of this year.

Bowon Vongsinudom President and CEO of PTTGC said the partnership could build a venture that is “well positioned in creating value for every end, especially for the Indonesian customers. The joint venture company business plan has been derived from the intensive market survey conducted jointly in the earlier stage.”

Following the HOA signing in April 2013 for the potential collaboration, PTTGC has supported Pertamina with its polymer product to conduct their sales and marketing activities in Indonesia.

Bowon Vongsinudom added on top of the gradually increasing volume of material supply from PTTGC, the joint venture company will also market Pertamina’s polypropylene, produced in Plaju facility, fulfilling domestic needs and ramping up its foothold in this promising market.

Strong domestic demand

Indonesia’s domestic demand for petrochemical products is expected to increase, due to the positive trend of manufacturing sector.

Bowon said Indonesian petrochemical market value is expected to reach US$30 billion in 2025 and with this partnership, Joint Venture Company is targeting to control 30% of market share after the Petrochemical Complex commercially operate in 2018.

Currently, the production of petrochemical in Indonesia is still insufficient to meet the downstream industry needs, creating large import to the amount of US$ 5 billion per year.

HanungBudya, Marketing & Trading Director of Pertamina, Indonesia has the best business potential for petrochemical product marketing in this region. “It’s time for us to grab this opportunity. The establishment of this marketing and trading joint venture company is definitely my pride and clearly in line with Pertamina’s strategy in growing the downstream business, especially for petrochemical.”  (*)