2005/12/22 Titan Chemicals
Titan Chemicals Corp.
BHD. to acquire PT PENI, Indonesia's largest polyethylene
producer through its subsidiary, Titan Petchem(M) SDN BHD
Titan Petchem (M) Sdn
Bhd, a wholly-owned subsidiary of Titan Chemicals Corp. Bhd. has
entered into a conditional sale and purchase
agreement with Golden Park Limited-Indika Group to acquire 100%
of the equity of Chemical Brothers Limited, 100% equity owner of
PT Petrokimia Nusantara Interindo ("PT PENI"). PT PENI,
Indonesian polyethylene producer, is the owner of a petrochemical
complex in Cilegon, Banten Province, comprising 3 Linear Low
Density Polyethylene ("LLDPE")/High Density
Polyethylene("HDPE") lines with a nameplate capacity of
complex was built by British Petroleum("BP") and the
plant utilizes BP's renowned Innovene Technology.
At the signing ceremony of the agreement graced by Indonesia Minister of Industry, Bapak Fahmi Idris, Malaysian Ambassador, Dato' Zainai Abidin Mahamad Zain and Chairman of Indonesia Investment Coordinating Board, Bapak Muhammad Lutfi, Titan Chemicals' Managing Director, Mr. Donald M. Condon Jr. said, "The proposed acquisition is a significant milestone in our journey as a newly listed company, as it will open doors to a host of opportunities.
"Our current production capacity is sold out, our company is strong and we shift now to concentrating on profitable growth - the proposed acquisition of PT PENI is our first significant step in that effort. This acquisition will increase the polyolefins capacity of Titan Chemicals by close to 50% and make it the largest polyolefins producer in South East Asia.
"With a population of 242 million people, Indonesia has per capita polylofins consumption of 6 kg/annum compared with 46 kg/annum in Malaysia, and 200 kg/annum in developed countries like the USA and Germany. The prospects for significant demand growth for polyethylene is therefore promising."
The proposed acquisition will provide Titan Chemicals with manufacturing capabilities and an opportunity to position itself in a large domestic market in a second ASEAN country outside of Malaysia.
It is expected that Titan Chemicals will replicate its business strategies which has been tested and proven in the Malaysian market. the Malaysian fabrication sector has quadrupled in scale since the inception of Titan Chemicals as a result of excellent product quality, reliability of supply, strong technical support and nurturing of the fabrication sector growth - a reflection of the symbiotic relationship between the downstream fabrication sector and the upstream petrochemicals industry.
The proposed acquisition is expected to improve Titan Chemicals' operability and reduce its production costs. Further the proposed acquisition will reflect the objectives of the industrial complementation strategies between ASEAN countries.
By way of the proposed acquisition, Titan Chemicals will be able to offer integrated solutions to a non-integrated producer. Besides being able to supply ethylene feedstocks to PT PENI from its Pasir Gudang facility, Titan Chemicals also will be able via its procurement network to supply feedstock chemicals and catalysts to PT PENI. Titan Chemicals will also be able to extend to PT PENI, the services of its Malaysian and International Marketing Network and Plastics technical Centre for Research & Development and the technical expertise of its Malaysian employees, many of whom have over a decade of experience in operating and maintaining petrochemical facilities.
For the nine months ended September this year, our revenue stands at close to USF 1 billion (RM3.4 billion) with earnings after tax of USD 90.5 million (RM 342 million).
About Titan Chemicals Corp. Bhd
Titan Chemicals was the first, and is the largest, integrated olefins and polyolefins producer in Malaysia and is the second largest polyolefins producer in Southeast Asia. Titan Chemicals presently operates eight plants on two integrated sites in Pasir Gudang and Tanjung Langsat in Johor, which are connected by a 12-km network of pipelines.
Titan Chemicals operates two principal business units, namely polyolefins, and olefins and aromatics. It has annual olefins production capacity of over 1,000,000 metric tonnes, and polymer capacity of more than 900,000 metric tonnes. These products are fundamental to the production of many diverse consumer and industrial products including flexible and rigid packaging, fibers and automotive parts. In addition Titan Chemicals has an aromatics plant that produces 200,000 metric tonnes of benzene and toluene. Benzene is used o produce styrene. phenol and cyclohexane which are used in the production of nylon, plastics and rubber. Toluene is used as an octane enhancer in gasoline as a chemical feedstock for benzene and/or paraxylene production as a solvent in paints.
December 22, 2005
Titan Chemicals To Expand Operation In Indonesia
Titan Chemicals Corp Bhd,
Malaysia's largest integrated producer of olefins and
polyolefins, aims to expand its operation in Indonesia following
its acquisition of PT Petrokimia Nusantara Interindo (PT Peni).
Titan, through its wholly-owned subsidiary, Titan Petchem (M) Sdn Bhd Thursday signed a conditional sale and purchase agreement with Golden Park Limited-Indika Group, to acquire 100 percent of the equity of Chemical Brothers Ltd, a 100 percent equity owner of PT Petrokimia Nusantara Interindo (PT Peni).
Speaking to reporters here today, Titan Chemicals' managing director Donald M. Condon Jr said the acquisition, expected to be completed by end of March, would see Titan increasing the current capacity of PT Peni, by 20 to 30 percent from the current 450,000 metric tonnes of polyethylene per annum.
"Our target for next year are the large consuming markets and their domestic markets. Indonesia is also in the list. The big issue now is the growth of plastic usage for next year which will determine the growth for the industry," he said after the signing ceremony.
The ceremony was witnessed by Indonesian Industry Minister Fahmi Idris and Malaysian Ambassador to Indonesia Datuk Zainal Abidin Zain.
Currently, Indonesia which has a population of 242 million people, has a per capita polyolefins consumption of six kg per person per annum, compared with Malaysia's 46 kg per person per annum, Condon said.
PT Peni which owns a 47-hectare of petrochemical complex in Cilegon, Bantem Province, has three production lines of linear low density polyethylene (LLDPE)/high density polyethylene (HDPE). Current plans for its include the building of a cracker.
Titan currently runs a massive RM6 billion petrochemical complex located in Pasir Gudang and Tanjung Langsat, comprising two Naptha crackers which produce among others, ethylene and propylene, the two main feedstocks for its five polyolefins plant.
Ethylene and propylene are the primary building blocks in the petrochemicals industry, used to produce diverse applications in the consumer and manufacturing industries.
For Titan, the acquisition would increase the polyolefin capacity of the group by close to 50 percent from the current 945,000 metric tonnes per annum, making it the largest polyolefin producer in Southeast Asia, Condon said.
An industry sources said building of the cracker is expected to cost about US$1 billion to US$4 billion.
Titan, which is currently the second largest polyolefin producer in Southeast Asia in capacity terms, is expected to become the largest in Southeast Asia with the acquisition of PT Peni.
Condon said its current production capacity was sold out, and with the additional capacity from PT Peni, it would be able to penetrate the domestic market here as well as expand its export market.
For now, PT Peni's production is for local consumption only.
On its performance, Condon said the group expected to realise earnings from PT Peni in its financial year ending Dec 31, 2007.
When asked on the purchase price of the PT Peni, he said it has not been finalised. He, however, added that it was an attractive investment.
On Wednesday, sources said that Titan would pay US$23 million (RM87.4 million) (US$1=RM3.8) for the company, which would be more cheaper when Indika Group took it over from Beyond Petroleum (BP Plc) and Mitsui and Sumitomo Corp for US$50 million.
Titan, a joint venture between government-controlled PNB Equity Resource Corp and Taiwan's Chao Group International, is Malaysia's largest maker of olefins and polyolefins, which are materials used to produce plastics and fibres used in mobile phones and car dashboards.
2006/3/21 Titan Chemicals
Titan Chemicals Corp, Bhd. becomes SEA's largest polyolefins producer with acquisition of PT PENI
Titan Chemicals Corp, Bhd. announced today that it has completed the acquisition of 100% of the equity of PT Petrokimia Nusantara Interindo (PT PENI) via its subsidiary, Titan Petchem (M) Sdn. Bhd. PT PENI, the largest Indonesian polyethylene producer, is the owner of a petrochemical complex in Cilegon, Banten Province, comprising 3 Linear Low Density Polyethylene ("LLDPE")/High Density Polyethylene ("HDPE") lines with a nameplate capacity of 450 KTA. The three lines utilize the world renowned Innovene Technology.
At a press conference marking the completion of the transaction, Titan Chemical's Managing Director, Mr. Donald M. Condon, Jr said, "This acquisition will give Titan additional manufacturing capability and position it as the largest polyolefins producer in South East Asia. PT PENI fits our business well and there are many synergies with this acquisition; significantly, we can bring integrated solutions to a non-integrated operation. More importantly, it opens the door to a huge Indonesian domestic market of 242 million people with a growing appetite for polymer-based products."
Titan Chemicals' current production capacity is sold out, and the company is financially strong, thus its management has shifted to concentrating on profitable growth - the proposed acquisition of PT PENI is its first significant step in that effort. This acquisition will increase the polyolefins capacity of Titan Chemicals by close to 50%. It would generally take an investment of several hundred million US dollars and 5 years or more to build a complex of this scale and the ability to add such capacity to its portfolio at a modest cost both in terms of expenditure and time is a major advantage to any petrochemical player like Titan.
Elaborating further, Mr. Condon said, "Moving forward, the company will be rebranded PT TITAN Petrokimia Nusantara or PT Titan in short. Having spent his most recent years at Titan leading international business development, making forays into China, Vietnam and the Middle East, Mr. Diau will bring great depth to PT PENI's marketing capabilities."
It is expected that Titan Chemicals will replicate its strategies which have been tested and proven in the Malaysian market. The Malaysian fabrication sector has quadrupled in scale since the inception of Titan Chemicals thanks to excellent product quality, reliability of supply, strong technical support and nurturing of the fabrication sector growth - a reflection of the symbiotic relationship between the downstream fabrication sector and the upstream petrochemicals industry.
On its plans to become operational, Mr. Jay Diau said, "Our priority is to ensure adequate feedstock supply from a combination of internal and external sources. We believe two lines are ready to start up and this will bring us 125 KTA and 200 KTA respectively. We aim to be operational within eight weeks."
An added benefit of the acquisition will be the realization of industrial complementation objectives within ASEAN as well as support of the Government's call to develop Malaysia-Indonesia business relationships. The acquisition is expected to improve Titan's operability and reduce production cost too.
Besides being able to supply ethylene feedstocks to PT Titan from its Pasir Ggudang facility, Titan Chemicals also will be able via its procurement network to supply feedstock chemicals and catalysts to PT Titan. Titan Chemicals will also be able to extend to its Indonesian operations, the services of its Malaysian and International Marketing Network and Plastics Technical Centre for Research & Development work and the technical expertise of its Malaysian staff; many of whom have over a decade of experience in operation and maintaining similar facilities.
Malaysian Titan Chemicals to test-run butadiene plant in December
Chemicals expects the building of its butadiene plant in Johor to
reach mechanical completion in late November, with test runs to
begin in December, a source close to the company said Thursday.
As Titan does not produce butadiene derivatives, all of the plant's output will be sold.
The company inked a five-year contract in March last year to supply butadiene to South Korea's Kumho Petrochemical, before it broke ground for the project.
"We look forward to shipping our product to them in the second half of 2007," Titan managing director Donald M. Condon said at the time in a company statement.
Titan's local butadiene buyers are likely to be Toray Industries, which has a 220,000 mt/year acrylonitrile-butadiene-styrene plant near Penang, and BASF PETRONAS Chemicals, which produces butanediol at Kuantan.
The 100,000 mt/year butadiene plant at Pasir Gudang, Johor, is being built by Taiwanese engineering and construction firm CTCI Overseas Corporation Limited.