MIRA INFORM REPORT

Report Date :

05.09.2014

IDENTIFICATION DETAILS

Name :	P.T. INDORAMA POLYCHEM INDONESIA
Registered Office :	Jalan Desa Kembang Kuning, Desa Kembang Kuning, Kecamatan Jatiluhur, Purwakarta, 41181, West Java
Country :	Indonesia
Date of Incorporation :	04.10.2011
Com. Reg. No.:	AHU-49382.AH.01.01.TH.2011
Legal Form :	Limited Liability Company
Line of Business :	Subject is deal with polymerization resins industry
No. of Employees :	570

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – September 30, 2013

Country Name	Previous Rating (30.06.2013)	Current Rating (30.09.2013)
Indonesia	B1	B1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

INDONESIA - ECONOMIC OVERVIEW

Indonesia, a vast polyglot nation, grew more than 6% annually in 2010-12. The government made economic advances under the first administration of President YUDHOYONO (2004-09), introducing significant reforms in the financial sector, including tax and customs reforms, the use of Treasury bills, and capital market development and supervision. During the global financial crisis, Indonesia outperformed its regional neighbors and joined China and India as the only G20 members posting growth in 2009. The government has promoted fiscally conservative policies, resulting in a debt-to-GDP ratio of less than 25%, a fiscal deficit below 3%, and historically low rates of inflation. Fitch and Moody's upgraded Indonesia's credit rating to investment grade in December 2011. Indonesia still struggles with poverty and unemployment, inadequate infrastructure, corruption, a complex regulatory environment, and unequal resource distribution among regions. The government in 2013 faces the ongoing challenge of improving Indonesia''s insufficient infrastructure to remove impediments to economic growth, labor unrest over wages, and reducing its fuel subsidy program in the face of high oil prices.

Source : CIA

BASIC SEARCH

Name of Company :

P.T. INDORAMA POLYCHEM INDONESIA

A d d r e s s :

Head Office & Factory

Jalan Desa Kembang Kuning

Desa Kembang Kuning, Kecamatan Jatiluhur,

Purwakarta, 41181

West Java

Indonesia

Phones - (62-264) 207727, 202311

Fax - (62-264) 211260

E-mail - infoipci@id.indorama.net

Website - http://www.indoramaventure.com

Land Area - 200,000 sq. meters

Building Area - 50,000 sq. meters

Region - Industrial Zone

Status - Owned

Corporate Office

Graha Irama, 17^th Floor

Jalan H.R. Rasuna Said X-1 Kav. 1 & 2

Jakarta Selatan, 12950

Indonesia

Phones - (62-21) 5261555 (Hunting)

Fax - (62-21) 5261501, 5261502

Building Area - 26 storey

Office Space - 2,500 sq. meters

Region - Commercial

Status - Owned

Date of Incorporation :

4 October 2011

Legal Form :

P.T. (Perseroan Terbatas) or Limited Liability Company

Company Reg. No. :

The Ministry of Law and Human Rights

No. AHU-49382.AH.01.01.TH.2011

Dated 10 October 2011

Company Status :

Foreign Investment (PMA) Company

Permit by the Government Department :

The Department of Finance

Not Available

The Capital Investment Coordinating Board

No. 2625/I/PPM/I/PMA/2011

Dated 29 September 2011

Related Company :

A Member Company of the INDORAMA Group (see attachment)

CAPITAL AND OWNERSHIP

Capital Structure :

Authorized Capital : US$ 35,000,000.-

Issued Capital : US$ 30,000,000.-

Paid up Capital : US$ 30,000,000.-

Shareholders/Owners :

a. INDORAMA NETHERLANDS B.V. - US$ 29,997,000.-

Address : Markweg 201, 3198 NB

Europoort Rotterdam

Netherlands

b. INDORAMA NETHERLANDS COOPERATIEF U.A. - US$ 3,000.-

Address : Markweg 201, 3198 NB

Europoort Rotterdam

Netherlands

BUSINESS ACTIVITIES

Lines of Business :

Polymerization Resin Industry

Production Capacity :

Synthetic Resin/ Synthetic Fibers - 313,000 tons per annum

Total Investment :

a. Equity Capital - US$ 30.0 million

b. Loan Capital - US$ 70.0 million

c. Total Investment- US$ 100.0 million

Started Operation :

December 2013 (trial production)

Brand Name :

Indorama Polychem Indonesia

Technical Assistance :

Indorama Netherlands B.V., Netherlands

Number of Employee :

570 persons

Marketing Area :

Export - 25%

Local - 75%

Main Customer :

Plastic Industries

Market Situation :

Very Competitive

Main Competitors :

a. P.T. ALKINDO MITRARAYA

b. P.T. ARINDO PACIFIC CHEMICALS

c. P.T. BASF INDONESIA

d. P.T. ETERNAL BUANA CHEMICALS

e. Etc.

Business Trend :

Growing

BANKER, AUDITOR & LITIGATION

B a n k e r s :

a. P.T. Bank PAN INDONESIA Tbk

Jalan Jend. Sudirman Kav. 55

Jakarta Selatan

Indonesia

b. P.T. Bank INTERNATIONAL INDONESIA Tbk

Plaza BII, Jalan M.H. Thamrin No. 55

Jakarta Pusat

Indonesia

c. BANGKOK Bank

Jalam M.H. Thamrin No. 3

Jakarta Pusat

Indonesia

d. AMERICAN EXPRESS Bank

Jalan H.R. Rasuna Said Kav. X-5

Jakarta Selatan

Indonesia

Auditor :

Internal Auditor

Litigation :

No litigation record in our database

FINANCIAL FIGURE

Annual Sales (estimated) :

2013 – None

Net Profit (estimated) :

2013 – None

Payment Manner :

Average

Financial Comments :

Satisfactory

KEY EXECUTIVES

Board of Management :

President Director - Mr. Udey Paul Singh Gill

Directors - a. Mr. Ramesh Kumar Narsinghpura

b. Mr. Saurabh Mishra

Board of Commissioners :

President Commissioner - Mr. Sri Prakash Lohia

Commissioners - a. Mr. Aloke Lohia

b. Mr. Suchitra Lohia

c. Mr. Amit Lohia

Signatories :

President Director (Mr. Udey Paul Singh Gill) or one of the Directors (Mr. Ramesh Kumar Narsinghpura or Mr. Saurabh Mishra) which must be approved by Board of Commissioner

CAPABILITIES

Management Capability :

Satisfactory

Business Morality :

Satisfactory

OVERALL PERFORMANCE

P.T. INDORAMA POLYCHEM INDONESIA (P.T. IPI) was incorporated in Purwakarta based on notary deed of Mrs. Novita Puspitarini, SH., No. 1 dated 4 October 2011 with the authorized capital of US$ 35,000,000 issued capital of US$ 30,000,000 entirely paid up. The founding and shareholders of the company are INDORAMA NETHERLANDS B.V., (99.99%) and INDORAMA NETHERLANDS COOPERATIEF U.A., (0.01%) both are a member company of the INDORAMA Group based in Netherlands. Based on our knowledge up to writing the report the notary documents of the company have not undergone any changes. The company notary deed was approved by the Ministry of Law and Human Rights in its decision letter No. AHU-49382.AH.01.01.TH.2011 dated October 10, 2011.

We observe that both shareholders INDORAMA NETHERLANDS BV., and INDORAMA NETHERLANDS COOPERATIEF U.A., is members company of the INDORAMA Group, a large sized business group dealing with integrated textile industry which majority shares is controlled and headed by Mr. Sri Prakash Lohia.

P.T. IPI operates under Foreign Investment (PMA) facilities to deal with polymerization resins industry. The plant is located at Jalan Desa Kembang Kuning, Jatiluhur, Purwakarta, West Java, standing on 200,000 sq. meters landsite. The plants will be produce of synthetic resin/ synthetic fibers of 313,000 tons per annum. The construction of the factory will absorbed an investment of US$ 100.0 million come from owned capital of US$ 30.0 million and the rest from loan. Synthetic resins are materials with a property of interest that is similar to natural plant resins: they are viscous liquids that are capable of hardening permanently. Otherwise, chemically they are very different from the various resinous compounds secreted by plants (see resin for discussion of the natural products). The synthetics are of several classes. Some are thermosetting plastics in which the term "resin" is loosely applied to the reactant or product, or both. Resin may be applied to one of two monomers in a copolymer (the other being called a hardener as in epoxy resins). Construction of the project has begun since early 2011 and completed in November 2013. Mrs. Mila, General Affairs P.T. IPI disclosed that the construction of the project under still processing up to present and they installed of production machines and other equipment and finished in November 2013. According information the plant has trial production since December 2013 and the first stage will produced of 270,000 tons synthetic resin. About 75% of P.T. IPI's production marketed in the country in the ranks of plastic manufacturing in the country and the rest is exported to Asian countries. We observe that P.T. IP is a new company still relatively new in trial production.

The volume production of synthetic or polyester fibers (polyester staple fiber / PSF) throughout the semester I/2013 has stagnant when compared to half of the 275,000 tons I/2012. Meanwhile, sluggish economic conditions that swept Europe and the United States as the main export destination for domestic producers to be the cause. Secretary General of Indonesian Synthetic Fiber Producers Association (APSyFI) Redma Gita Wirawasta mentions throughout the semester I/2013, growing demand from the United States but not significant at just over 1%, while demand from Europe actually fell by 20% -30%.

At half I/2013 semesters, synthetic fiber production from China still dominates. Was stock from last year are spent. Thus, subject to the impact of domestic production," said Redma. However, optimistic Redma polyester production in the country at half II/2013 will increase to 325,000 tons, up until the end of the year the total production is able to reach 600,000 tons. This exceeded the target amount of production over the past year is only 556,000 tons. In the second quarter 2013, Redma the fate of production volume on domestic consumption to sustain the achievement of this year. He said this year's domestic demand is still good enough that 6.6 kg per capita compared to last year, 6.3 kg per capita.

Raising the price of fuel oil (BBM) and raising the wages he is still able to sustain the value of the purchasing power of textile products. However, the government can reduce the impact of record fuel prices raising the prices of basic needs, especially food and protect the textile industry and textile products (TPT) of the Chinese import invasion.

Indonesia is the 6th largest producer world to polyester with a production capacity of 1.4 million tons per year. Manufacturers of synthetic in Indonesia domestic market oriented, PSF and PFY 90% 65%. The main raw material 100% polyester is the PTA supplied the domestic industry and MEG supplied 30% of the domestic industry, 70% of imports. Caprolactam as raw material Nylon 100% imported. Demand for polyester textile raw materials in the country (Indonesia) is still high because organic textile raw material such as cotton is difficult to grow in Indonesia. So the polyester is still an option for the textile industry in Indonesia.

National Polyester Production, 2007 – 2012

Year	Polyester Staple Fiber (PSF)	Polyester Filament Yarns (PFY)	Nylon Yarns (NY)
2007 2008 2009 2010 2011 2012	497715 500,670 505,674 515,680 529,700 556,000	715,000 670,000 674,000 680,000 700,000 725,000	16,360 17,443 18,556 19,740 21,000 32,000

Source: APSyFI, Processed by ICB

Considering P.T. IPI still new in trial production December 2013, the financial condition of the company is just as it’s paid up capital of US$ 30.0 million as stated in its article of association. The financial condition of the company strongly depends on the financial condition of its shareholders. P.T. IPI is backed up by the INDORAMA NETHERLANDS B.V., of Netherlands which has financially strong behind it.

The management of P.T. IPI is led by Mr. Udey Paul Singh Gill (61) a professional manager of India with experience in polyester filament yarn industry. He is also President Director of P.T. INDORAMA VENTURES INDONESIA engaged in polyester filament yarns industry. He is also professional manager of INDORAMA Ventures Public Company, in petrochemical and chemical industry based in Thailand. However we are sure the prime mover is Mr. Sri Prakash Lohia (62) a top figure of the INDORAMA Group. The company's management is handled by professional staff in the above business. They have wide relations with private businessmen within and outside the country.

So far, we did not hear that the management of the company being filed to the district court for detrimental cases or involved in any business malpractices. Considering P.T. INDORAMA POLYCHEM INDONESIA still relatively new in production December 2013, we recommend to treat prudently in business transaction and in extending a loan to the company.

Attachment:

List of the INDORAMA Group Members

ASHOK TEXTILE Industries, Ltd., Nepal (Textile Industry)

AUTUM INVESTMENT Ltd., Hong Kong (Holding Company)

BANGADUA PETROLEUM, P.T. (Oil & Natural Gas Exploration)

BROOKGRANGE INTERNATIONAL FINANCE LTD., The U.K. (Financing Service)

INDOMULIA MITRAJAYA, P.T. (Shrimp Culture)

INDORAMA CHEMICALS (Thailand) Ltd., Thailand (Chemicals Manufacturing)

INDORAMA NETHERLANDS BV., (Investment Holding)

INDORAMA NETHERLANDS COOPERATIEF U.A. (Investment Holding)

INDORAMA PETROCHEMICALS, P.T. (Purified Terephthalic Acid Manufaccturing)

INDORAMA POLYCHEM INDONESIA, P.T. (Polymerization Resin Industry)

INDORAMA POLYESTER INDUSTRIES INDONESIA, P.T. (Polyester Filament Yarn Industry)

INDORAMA PROJECTS AND SERVICES Ltd., India (Consulting and Investment Holding)

INDORAMA SYNTHETICS (India) Ltd., India (Chemicals Manufacturing)

INDORAMA SYNTHETICS Tbk, P.T. (Spinning Mills and Investment Holding)

INDORAMA TRADE AND DEVELOPMENT SERVICES, P.T. (General Trading)

INDORAMA VENTURES INDONESIA, P.T. (Polyester Filament Yarn and Polyester Resin Industry)

INDORAMA VENTURES PUBLIC LISTED LTD,. Thailand (Polyester Filament Yarn Industry)

INDOSPECT ASIA PETROLEUM BANGADUA, P.T. (Oil and Gas Exploration and Production)

IRAMA DINAMIKA LATEX, P.T. (Latex Goods Manufacturing)

IRAMA UNGGUL, P.T. (Trading and Investment Holding)

JAKARTA MAJU PUSAKA, P.T. (Trading and Suppliers)

LOHIA INDUSTRIES PVT.,LTD., India (Investment Holding)

MITRABANGUN GRIYA, P.T. (Office Block Rental Management)

RAMATEX Ltd., (Hong Kong), (Investment Holding)

SK WAHANA INTERNATIONAL, P.T. (Textile Industry)

THONBURI LACE Co. ,Ltd., Thailand (Investment Holding)

* * *

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.60.45
UK Pound	1	Rs.99.46
Euro	1	Rs.79.46

INFORMATION DETAILS

Report Prepared by :

SDA

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