Loan for Manufacturing and Sales of Acrylic Acid in Indonesia
Supporting Overseas Business Expansion of Japanese Chemical Industry through JBIC's Global Facility to Promote Quality Infrastructure Investment for Environmental Preservation and Sustainable Growth
- Region: Asia
- Manufacturing and Services
- Overseas Investment Loans
The Japan Bank for International Cooperation (JBIC; Governor: Tadashi Maeda) signed on April 26 a loan agreement totaling up to USD 96 million (JBIC portion) with PT. NIPPON SHOKUBAI INDONESIA (NSI), an Indonesian subsidiary of NIPPON SHOKUBAI CO., LTD (NIPPON SHOKUBAI). The loan is provided as part of JBIC's Global Facility to Promote Quality Infrastructure Investment for Environmental Preservation and Sustainable Growth (QI-ESG). *1
The loan is co-financed with a private financial institution, bringing the total co-financing amount to USD 200 million.
This loan is intended to finance the increase of production capacity and the optimization of existing equipment for NSI's acrylic acid manufacturing and sales business in Cilegon, Banten province, located in the western part of the island of Java, Indonesia. Acrylic acid is used as a key material of superabsorbent polymer (SAP), which is primarily used in disposable diapers and sanitary products, as well as acrylate (AES), which is used in adhesive, paint and others.
Against a backdrop of strong economic growth in recent years, demand for acrylic acid, AES and SAP is forecast to greatly increase, especially in the Asia region, and among these materials, the demand and supply balance of acrylic acid are growing tight. Since NIPPON SHOKUBAI established NSI in 1996, NSI's production capacity of acrylic acid, AES and SAP has been sequentially improved and expanded. However, taking into account the current supply and demand situation as well as the demand forecast, NIPPON SHOKUBAI has made the decision to increase the production capacity for acrylic acid. Also, this investment will optimize energy use within the plant through upgrades to existing equipment in addition to making use of the waste heat from the acrylic acid manufacturing process. This project, thus, will contribute to maintaining and enhancing the international competitiveness of Japanese industry by financially supporting the overseas expansion of NIPPON SHOKUBAI, and will also contribute to the preservation of the global environment through this effective use of waste heat and efficient use of energy by upgrading equipment.
As Japan's policy-based financial institution, JBIC will continue to support the overseas business deployment of Japanese companies, by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function.