 "Asahi Glass to invest $400 mn in Indonesia")
Asahi Glass Co Ltd (AGC) will invest approximately $ 400 million to construct a power plant at its Indonesian subsidiary PT Asahimas Chemical (ASC). Asahi Glass will enhance the competitiveness of its chlor-alkali business in Southeast Asia by significantly reducing power rates, a major cost item of that business. The power plant is scheduled to commence operation within 2017.
The caustic soda and polyvinyl chloride (PVC) market in Southeast Asia is projected to grow at over 5 percent per year. Of demand in the market, Indonesia, Thailand and Vietnam, where Asahi Glass has bases for the chlor-alkali business, account for 70%.
In order to meet the rising demand from these growth markets, AGC has been working to grow business, by looking at Southeast Asia as a whole and leveraging synergies in the Group in the region, through measures including the enhancement of production capacity at Asahimas Chemical, which is scheduled to be completed at the end of 2015, the purchase of a Vietnamese PVC manufacturing company and the increase of its production capacity.
This investment will realise cost reduction of electricity, one of the main materials, and will help AGC to build dominant competitiveness not only in Indonesia but also in the entire Southeast Asia.
To cope with increasing demand for electric power, Indonesia plans to reinforce thermal power stations fuelled by coal that is produced in the country. To that plan, Japan proposes high efficiency power generation using circulation fluidised bed boilers (CFB method) or ultra-supercritical power plant, etc, aimed at reducing CO2 emissions. The power plant to be constructed by AGC will be a coal-fired power plant (having a generation capacity of approximately 250 MW) that uses low-grade coal of Indonesia, whose reserve is large and which can be obtained easily. It will adopt the high efficient, environmentally-friendly CFB method, which is capable of co-generation and mixed fuel burning of biomass fuel.
Under its management policy AGC plus, AGC positions the overseas chlor-alkali business as one of growth businesses. Through a series of measures, including this investment, AGC will steadily take in expanding demand and aim to raise the operating profit margin of the Group’s chemicals segment to 10 percent or more in 2017.
The caustic soda and polyvinyl chloride (PVC) market in Southeast Asia is projected to grow at over 5 percent per year. Of demand in the market, Indonesia, Thailand and Vietnam, where Asahi Glass has bases for the chlor-alkali business, account for 70%.
In order to meet the rising demand from these growth markets, AGC has been working to grow business, by looking at Southeast Asia as a whole and leveraging synergies in the Group in the region, through measures including the enhancement of production capacity at Asahimas Chemical, which is scheduled to be completed at the end of 2015, the purchase of a Vietnamese PVC manufacturing company and the increase of its production capacity.
This investment will realise cost reduction of electricity, one of the main materials, and will help AGC to build dominant competitiveness not only in Indonesia but also in the entire Southeast Asia.
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To cope with increasing demand for electric power, Indonesia plans to reinforce thermal power stations fuelled by coal that is produced in the country. To that plan, Japan proposes high efficiency power generation using circulation fluidised bed boilers (CFB method) or ultra-supercritical power plant, etc, aimed at reducing CO2 emissions. The power plant to be constructed by AGC will be a coal-fired power plant (having a generation capacity of approximately 250 MW) that uses low-grade coal of Indonesia, whose reserve is large and which can be obtained easily. It will adopt the high efficient, environmentally-friendly CFB method, which is capable of co-generation and mixed fuel burning of biomass fuel.
Under its management policy AGC plus, AGC positions the overseas chlor-alkali business as one of growth businesses. Through a series of measures, including this investment, AGC will steadily take in expanding demand and aim to raise the operating profit margin of the Group’s chemicals segment to 10 percent or more in 2017.