Plans to submit proposal to block cuts in import duty on polyolefins supplied from MFNs in Indonesia

23-Jun-08

Players in Indonesia's polypropylene (PP) industry plans to submit a proposal to the government to help block cuts in import duty on polyolefins supplied from Most Favoured Nations (MFNs). Under its World Trade Organisation membership obligations, Indonesia is bound to reduce the import duty in January, on PP and polyethylene (PE) imported from the MFNs to 7.5%, from the current 10%. The proposal envisages a plan for the domestic industry to invest in new capacity over the next few years if the import duty on material from the MFNs is maintained at 10%. Domestic oil and gas major Pertamina plans to install a residual fluid catalytic cracking (RFCC) unit at Cilacep by 2012 to produce 150000 tpa of propylene, set up a new 250000 tpa PP plant in Balongan by the end of 2010, expand its propylene capacity at Balongan city by 80000 tpa to 260,000 tpa by H2-2009. Pertamina currently operates a 46000 tpa PP plant at Palembang and is due to start up an olefins conversion unit at Balongan by 2010 to produce about 180000 tpa of propylene.