Indonesian Barito Pacific Group's caustic soda investment plan
Source: Overseas Chemical Industry 
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April 7, 2024, 11:29 AM
In April 2023, PT Chandra Asri Petrochemical Tbk (TPIA) under the Barito Pacific Group and the Indonesian sovereign wealth fund Indonesia Investment Authority (INA) signed a Memorandum of understanding (MoU) to jointly develop a world-class chlor-alkali plant in Indonesia.
INA will work with other potential international investors to explore plans to buy shares in PT Chandra Asri Alkali (CAA), a wholly owned subsidiary of Chandra Asri, which has been established as a special purpose vehicle to invest in the construction of a world-class chlor-alkali plant.
The plant will produce more than 400000 metric tons of caustic soda (also known as sodium hydroxide) and 500000 metric tons of dichloroethane (EDC) each year.
PT Chandra Asri Petrochemical Tbk (TPIA), through its subsidiary PT Chandra Asri Alkali (CAA), conducted a related party transaction through the purchase of 513658 square meters of PT Krakatau Daya Listrik (KDL) land, which was signed on September 29th, 2023.
Citing information from the Indonesian Stock Exchange (IDX), the land is located in the Krakatau industrial zone in the Citangkil district of Wandan Cilegon and is worth 1.15 trillion rupiah. PT CAA bought the land from PT KDL to meet the needs of CAA to build a factory in Zilgon.
The transaction will be carried out in phases and will be marked by the signing of a deed of sale and purchase (AJB) for each building right of use covered by the land (SHGB), provided that the AJB signing of all parts of the land must be completed by December 31, 2024.
PT KDL is also the holding company of the company, which is engaged in the power industry and power services, owns the land and is willing to sell the land to PT CAA and / or its affiliates.
In addition, considering that the land area of the transaction does not cover the entire SHGB area, PT KDL is willing to split some SHGB if necessary and then transfer it to PT CAA and / or its subsidiaries (SHGB split).
For PT CAA, the advantage of this transaction is that the plant is located near the power supply of PT KDL, so the power supply in the factory area of PT CAA and / or its affiliates will be more secure and stable. Therefore, for PT CAA and its subsidiaries, this piece of land has become very strategic in planning and achieving future factory development.
The two sides agree to buy and sell land at a price of 2250000 rupiah per square meter, excluding VAT and other transaction costs.
Before August 31, 2023 or prior to the signing of AJB, CAA and KDL had signed a land lease agreement. KDL agreed to lease 297264 square meters of land to CAA.
The relationship between the two companies is established because CAA and KDL are holding companies of TPIA. Chandra controls 70 per cent of KDL through its subsidiary PT Chandra Daya Investasi. Meanwhile, 99 per cent of CAA is controlled by TPIA through its subsidiary PT Chandra Asri Perkasa. (excerpt from cnbcindonesia)
Caustic soda is an important raw material for Indonesia's growing downstream industries, such as alumina extraction, nickel extraction, water treatment, textile production, pulp and paper, and soap and detergent production.
Dichloroethane is the main raw material for the production of intermediate chemicals of polyvinyl chloride (PVC). It is widely used in a variety of final product applications, including construction and packaging.
This investment clearly supports Indonesia's ambition as one of the world's largest nickel producers to position itself in the global electric vehicle value chain to meet the growing demand for caustic soda. The increase in the global use of electric vehicles will boost demand for nickel, the main raw material for batteries. Source: overseas chemical industry
INA will work with other potential international investors to explore plans to buy shares in PT Chandra Asri Alkali (CAA), a wholly owned subsidiary of Chandra Asri, which has been established as a special purpose vehicle to invest in the construction of a world-class chlor-alkali plant.
The plant will produce more than 400000 metric tons of caustic soda (also known as sodium hydroxide) and 500000 metric tons of dichloroethane (EDC) each year.
PT Chandra Asri Petrochemical Tbk (TPIA), through its subsidiary PT Chandra Asri Alkali (CAA), conducted a related party transaction through the purchase of 513658 square meters of PT Krakatau Daya Listrik (KDL) land, which was signed on September 29th, 2023.
Citing information from the Indonesian Stock Exchange (IDX), the land is located in the Krakatau industrial zone in the Citangkil district of Wandan Cilegon and is worth 1.15 trillion rupiah. PT CAA bought the land from PT KDL to meet the needs of CAA to build a factory in Zilgon.
The transaction will be carried out in phases and will be marked by the signing of a deed of sale and purchase (AJB) for each building right of use covered by the land (SHGB), provided that the AJB signing of all parts of the land must be completed by December 31, 2024.
PT KDL is also the holding company of the company, which is engaged in the power industry and power services, owns the land and is willing to sell the land to PT CAA and / or its affiliates.
In addition, considering that the land area of the transaction does not cover the entire SHGB area, PT KDL is willing to split some SHGB if necessary and then transfer it to PT CAA and / or its subsidiaries (SHGB split).
For PT CAA, the advantage of this transaction is that the plant is located near the power supply of PT KDL, so the power supply in the factory area of PT CAA and / or its affiliates will be more secure and stable. Therefore, for PT CAA and its subsidiaries, this piece of land has become very strategic in planning and achieving future factory development.
The two sides agree to buy and sell land at a price of 2250000 rupiah per square meter, excluding VAT and other transaction costs.
Before August 31, 2023 or prior to the signing of AJB, CAA and KDL had signed a land lease agreement. KDL agreed to lease 297264 square meters of land to CAA.
The relationship between the two companies is established because CAA and KDL are holding companies of TPIA. Chandra controls 70 per cent of KDL through its subsidiary PT Chandra Daya Investasi. Meanwhile, 99 per cent of CAA is controlled by TPIA through its subsidiary PT Chandra Asri Perkasa. (excerpt from cnbcindonesia)
Caustic soda is an important raw material for Indonesia's growing downstream industries, such as alumina extraction, nickel extraction, water treatment, textile production, pulp and paper, and soap and detergent production.
Dichloroethane is the main raw material for the production of intermediate chemicals of polyvinyl chloride (PVC). It is widely used in a variety of final product applications, including construction and packaging.
This investment clearly supports Indonesia's ambition as one of the world's largest nickel producers to position itself in the global electric vehicle value chain to meet the growing demand for caustic soda. The increase in the global use of electric vehicles will boost demand for nickel, the main raw material for batteries. Source: overseas chemical industry