PETALING JAYA: Lotte Chemical Titan Holding Bhd
’s (LCT) subsidiary, PT Lotte Chemical Indonesia (LCI), has entered into a 12-year loan facility amounting to US$2.4bil (RM10.7bil) with the Export-Import Bank of Korea, Korea Trade Insurance Corp and other commercial banks.
The loan facility will be used to finance the development works of LCI’s integrated petrochemical facility, also known as the Lotte Chemical Indonesia new ethylene (line) project.
LCT president and chief executive officer Park Hyun Chul said the construction of the project, slated for completion in 2025, is progressing on schedule.
“As at Jan 6, Lotte Chemical Corp (LCC) and LCT had completed their portion of equity injection of US$1.6bil (RM7.2bil) into LCI, representing 40% of the capital structure.
“The completion of the loan facility for the line project marked an important milestone with the finalisation of the remaining capital funding for the project,” he said in a statement yesterday.
LCT holds an effective equity interest of 51% in LCI, the owner of the line project, while LCC holds the remaining 49%. LCC is the guarantor of the loan facility.
Park said the line project would provide synergistic advantages to the group’s three existing standalone polyethylene plants in the vicinity by reducing transportation and logistics costs and contributing to higher operational and cost efficiencies.
“The line project serves as a key strategic expansion for the group to solidify LCT’s position as a top-tier petrochemical company in South-East Asia. The project includes the development of a cracker plant that will use naphtha and liquefied petroleum gas as its feedstock to produce, among others, 1,000 kilo tonnes per annum (KTA) of ethylene and 520 KTA of propylene,” he said.
The production capacity of LCT is expected to increase by 65% to 5,878 KTA from its current production capacity of 3,568 KTA.
As Indonesia is a net importer of petrochemical products, the project would enable the group to capitalise on the anticipated increase in demand for its products in the country, Park added.
