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Jun 10, 2016 10:05:34
Barito Pacific poised for better performance after plant resumes operations
Diversified petrochemical firm PT Barito Pacific expects a rebound from its slow business last year after resuming operations at a plant belonging to its subsidiary PT Chandra Asri Petrochemical in Cilegon, West Java.
The plant, which produces materials like olefins, poly olefins, and butadiene resumed operations in January and is expected to help the company realize its revenue target of US$2.05 billion this year, up 50 percent from last year, when the company booked $1.41 billion.
“We have fully returned to the industry since the Cilegon plant began operating,” the company’s director Henky Susantyo said after the company’s annual general shareholders meeting on Wednesday.
The plant underwent a major overhaul in the last four months of 2015, and Chandra Asri’s production was halted during the period.
The halt in production led to Barito Pacific, which owns a 50.19 percent share in Chandra Asri, posting a 43 percent revenue decline last year to $1.41 billion from $2.48 billion in 2014.
In addition to the maintenance works from September to December last year, Chandra Asri also increased the plant’s production capacity by 43 percent to 860,000 tons from 600,000 tons previously. Henky said the increased capacity would help Barito Pacific rise again from its slow business last year.
“Our business revival can be seen in our good financial performance in the first quarter this year,” he said, adding that the company had implemented several strategies to boost efficiency to tackle the production decline last year.
Despite its first quarter revenue only going up by 1 percent, to $366.1 million from $362.78 million in the corresponding period last year, Barito Pacific’s profit in the first three months of the year rose by 80 percent to $12.1 million from $1.4 million during the same period in 2015.
Barito Pacific was established as PT Bumi Raya Pura Mas Kalimantan in 1979. Previously controlled by local tycoon Prajogo Pangestu, the current majority shareholder is US-based holding company Magna Resources Corporation Pte. Ltd with 52.13 percent.
Aside from Chandra Asri, Barito Pacific owns many subsidiaries in different industries, such as PT Royal Indo Mandiri in the crude palm oil industry and PT Griya Idola in the property sector.
The firm is currently building a $435 million synthetic rubber plant with French tire manufacturer Michelin. The megaproject, situated nearby Chandra Asri’s plant in Cilegon, started construction in December last year and is expected to finish by early 2018.
In the joint venture, Barito Pacific and Michelin will collaborate to help the latter produce synthetic rubber for its tires. The plant will have an annual capacity of 120,000 ton of butadiene – synthetic rubber’s raw material – to help Michelin accelerate its tire supply domestically and overseas. (adt/dmr)