Michelin-Chandra Asri JV inaugurates Indonesia rubber plant

Cilegon, Indonesia – PT Synthetic Rubber Indonesia (PTSRI), officially inaugurated its plant for the production of butadiene rubber (BR) and solution styrene butadiene rubber (SSBR), the Michelin-Chandra Asri Petrochemical joint venture has announced.

The 29 Nov opening of plant in Cilegon was attended by the country’s minister of industry Airlangga Hartarto and other senior government officials.

Established in June, 2013, PTSRI is a JV between Michelin and PT Chandra Asri Petrochemical Tbk, with a share-ownership of 55% and 45% respectively.

Chandra Asri, Indonesia’s largest petrochemical company, is supplying feedstock including butadiene for the SR plant which is based on Michelin technology.

Michelin’s third synthetic rubber plant – after units in France and the US – the Cilegon plant is targeted to reach a production capacity of 120 kilotonnes per annum (ktpa) for BR and SSBR.

The facility is said to be the first plant of its kind in Indonesia to produce BR with neodymium catalyst and SSBR.

PTSRI’s partners have invested $435 million in the collaboration, which has received tax-break incentives from the Indonesian government.

"The government appreciates the steps taken by Michelin and Chandra Asri in developing manufacturing industries that provide highly competitive products through the use of technology,” said Airlangga.

“We know that the presence of SRI will contribute directly to driving Indonesia's economic growth in a sustainable manner,” the ministry of industry added.

Michelin's collaboration with Chandra Asri is a strategic step in supporting the realisation of a sustainable business, according to Florent Menegaux, general managing partner of the French tire and rubber products group.

“Michelin needs more regular supply of synthetic rubber to ensure growth of its “green” tires globally,” said Menegaux. “Thus, we are partnering with the largest Indonesian petrochemical company, Chandra Asri, as concrete evidence of our interest to invest in Indonesia.”

"This collaboration can further enhance Chandra Asri's competitiveness nationally and internationally. For the initial phase, we are confident to fulfil all Michelin’s needs for synthetic rubber," said Erwin Ciputra, president director of Chandra Asri.

Indonesia aims to further develop SR production in the country to support domestic manufacture of tires, conveyor belts, rubber components, footwear, and insulated electric cable.

While domestic demand for SR in Indonesia is currently running at 230 kilotonnes per annum (ktpa), production capacity is just 75ktpa, government figures show.

In a separate statement, Agus Pangestu, president director of parent group PT Barito Pacific, noted that with completion of a 37ktpa expansion in June subsidiary Chandra Asri Petrochemical Tbk (TPIA) now operates a butadiene plant with a new capacity of 137ktpa.

The expansion increases the value of mixed C4, a raw material for butadiene plant previously in surplus after the cracker expansion back in 2015, said Pangestu.