Japanese-backed Asahimas Chemical plans to invest $885 million over the next few years to expand its existing factory in Indonesia and build a power plant.a
“We are confident in chemical business prospects in Indonesia,” Takuya Shimamura, the chief executive and president of parent company Asahi Glass, said on Wednesday. “That’s why we have decided to increase the investment.”
Asahimas has operated in Indonesia for 40 years and invested a total of $600 million during that time.
The company expects demand for its products to rise in line with manufacturing activity in Indonesia, while the government has committed to ensuring an uninterrupted supply of raw materials for the company.
The company produces caustic soda, vinyl chloride monomer and polyvinyl chloride – or PVC, a common ingredient in making plastic components – with byproducts such as chlorine gas, hydrogen, hydrochloric acid and sodium hypochlorite.
Its main product, caustic soda, is an essential ingredient in the textiles and pulp and paper industry.
Asahimas’s announcement comes after the government said it would replace a quota-based system for salt imports with a tariff-based one.
“There will be no more quantity cap on salt imports. That will ensure supply to domestic manufacturers [including Asahimas],” said Harjanto, the director general of chemical and textile industries at the Industry Ministry.