LOTTE Chemical Titan Holding Berhad subsidiary, PT LOTTE Chemical Indonesia has entered into a 12-year term loan facility of USD2.4 billion (equivalent to approximately RM10.58 billion) with the Export-Import Bank of Korea, Korea Trade Insurance Corporation and other commercial banks (“Loan Facility”) to fund the development works of its Integrated Petrochemical Facility which is also known as the LOTTE Chemical Indonesia New Ethylene Project.
LCT holds an effective equity interest of 51% in LCI, the owner of the LINE Project, while LOTTE Chemical Corporation holds the remaining 49%. LCC is the guarantor of the Loan Facility. President & CEO of LCT, Mr Park Hyun Chul commented, ‘the construction of the LINE Project commenced in January 2022 and it is slated for completion in 2025. I am glad that the construction progress, thus far, is on schedule and we are confident that the LINE Project will be completed on time. As at 6 January 2023, LCC and LCT had completed their portion of the equity injection of USD1.6 billion into LCI, representing 40% of the capital structure. The completion of the Loan Facility for the LINE Project marked an important milestone with the finalisation of the remaining capital funding for the project.’
‘The LINE Project serves as a key strategic expansion for the Group to solidify LCT’s position as a Top-Tier Petrochemical Company in Southeast Asia. The project also provides synergistic advantages to the Group’s 3 existing standalone polyethylene plants which are in the vicinity of the project by reducing feedstock transportation and logistics costs as well as higher operational and cost efficiencies,’ added Mr Park.
The LINE Project includes the development of a cracker plant that will use naphtha and liquefied petroleum gas as its feedstock to produce, amongst others, 1,000 Kilo Tonnes per Annum of ethylene and 520 KTA of propylene. Upon completion, the production capacity of the Group will increase by 65% to 5,878 KTA from its existing production capacity of 3,568 KTA. As Indonesia is a net importer of petrochemical products, the project will enable us to capitalise on the anticipated increase in demand for our products in the country,’ stated Mr Park.
