Ethylene Glycol Operations
   
The Ethylene glycol (EG) plant produces one of the two mainraw materials required to produce polyester which is highly required by the Indonesian's growing textile industries.

Production

The Company's two EG plants adopt a patented technology from Scientific Design Co. Inc., USA. And have an annual production capacity of 216,000 tons. Ethylene as a main raw material, is supplied from local and international suppliers.

Adjacent to its ethylene glycol facilities, in 2003 the Company completed the construction of the Indonesia's first ethoxylate plant with licensed from Scientific Design Co. Inc., USA. With a total investment of US$  10 million, the plant has an annual production capacity of 29,000 tons . The main raw material use in producing ethoxylate, ethylene oxide, is an intermediate product from the Company?s ethylene glycol plant. Other raw materials are fatty alcohol, which can be purchased locally, and nonyl phenol, which has to be imported.

Products

The ethylene glycol plants produce one main product, mono-ethylene glycol (?MEG?), and two by-products, di-ethylene glycol (DEG) and tri-ethylene glycol (TEG). About 27 % of the MEG productions was consumed by the company?s polyester division. Other main consumers of MEG are polyester synthetic fiber manufacturers and polyester terephtalate (PET) resin producers. MEG is also used as a cooling agent and anti-freeze. DEG is used in the unsaturated polyester resin industry, brake fluid industry and additive oil industry, while TEG is used in gas dehydration process and chemical cleaning purposes.

Sales


During 2003, The EG product sales reached Rp. 785 billion. The EG total sales represented 26 % of the Company's total consolidated sales in 2003. In term of value, 29% of the Company's ethylene glycol sales (MEG 79%, DEG 8%, TEG 5%, and 8% EOX and others) were made to the domestic market which some of them are in the form of long-term sales arrangements with a number of major Indonesia's polyester producers. The Company?s EG export, which represented 71% of the EG total sales, were mainly made to Asia, North America and Europe. Since 2000, the Company has started to sell ethoxylate to domestic and overseas detergent manufacturers.

Ethylene Glycol Market Overview

The sale of MEG products are closely linked to the demand from the domestic polyester industry and currently Indonesia is net importer of MEG. In 2003 , the MEG domestic demand was estimated around 550,000 tons, while the Company, as the only EG producer in Indonesia, has only an annual production capacity of 216,000 tons. This condition brings a big opportunities, especially if we look at the fact that the Company has sufficient economies of scale to compete against international EG producers from Saudi Arabia, United States, Japan and Singapore.