Taiwanese textile manufacturers in Bandung, Indonesia’s third-largest city, yesterday welcomed a proposal to relocate a naphtha cracker to the Southeast Asian nation, a move that would lower material costs.
“Indonesia is deeply reliant on petrochemical imports to supply its textile industry,” PT. Sinar Majalaya Lestari (興南印染) president Ko Pai-kuan (柯百觀) said.
Established in 2008, PT. Sinar Majalaya Lestari is one of the largest Taiwanese-founded textile suppliers in Bandung, an important production hub for the global textile industry.
The relocation of a Taiwanese naphtha cracker would fill a gap in the supply of upstream materials in Indonesia, Ko said, adding that the cracker should be a bilateral collaboration.
Such a move would ensure self-sufficient material resources for Indonesian companies and would reduce production costs, he said.
The cooperation could also enable Taiwan’s petrochemical industry to explore more opportunities in Southeast Asian markets, Ko said, citing the potential establishment of an industry cluster.
Echoing Ko’s remarks, Taiwan Business Club Bandung Indonesia chairman Andy Wang (王安左) said the move could help Indonesia-based textile suppliers compete with their global peers with the support of cheaper material costs.
As a second-generation member of his family business, Wang is also in charge of PT. Derma International Co (得滿), which makes clothing for customers worldwide.
“We will be glad to see the relocation push through,” Wang told the Taipei Times, adding that Taiwan is the largest foreign investor in Bandung’s textile industry.
Wang said the progress of the proposal, including how the two nations would proceed with the deal, bear watching.
Their comments came after state-run CPC Corp, Taiwan (CPC, 中油) said it was assessing the possibility of selling the nation’s fifth naphtha cracker to Indonesia’s state-run oil and natural gas supplier PT Pertamina, in a bid to explore “southbound” business opportunities by establishing a complete supply chain of petrochemicals.
State-run CPC has been trying to sell the naphtha cracker in Kaohsiung to foreign buyers over the past three years.
The facility has been idle since the end of 2015.
A small group of top company officials would travel to Indonesia to talk with PT Pertamina by the end of this month before the assessment is completed, CPC president Lee Shun-chin (李順欽) said.
The Indonesian oil supplier might turn down the deal due to the facility’s limited production capacity, local media have reported.
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