KUALA LUMPUR (April 24): Lotte Chemical Titan Holding Bhd (LCT) said a final decision on its integrated petrochemical facility project in Indonesia could be reached by year end.

“We hope to make a final investment decision by end of this year or early next year, depending on completion of the feasibility study and environmental impact assessment, which are now at tail-end.  

"And once that decision is made, we will commence construction,” said Philip Kong Chock Hoon, executive vice president of LCT's corporate planning unit, at a press conference held after the group’s first annual general meeting today. 

LCT is looking to construct a naptha cracker with a capacity of one million tonnes, next to its existing plant in Merak, Cilegon in Indonesia’s Banten province. 

The mega project, which is estimated to cost about US$3 billion (RM11.72 billion) to US$4 billion (RM15.63 billion), will take three to four years to complete, Kong added. 

According to LCT’s prospectus, the integrated petrochemical facility project is to be funded via proceeds raised from its initial public offering back in July 2017. 

Kong said Indonesia remains a crucial market for the group, as it is a net importer of petrochemicals backed by a huge population of nearly 300 million. 

“When we sell in Indonesia and Malaysia, we enjoy a slight premium over international prices. [So] we are looking at duplicating our Malaysian facilities in Indonesia, and increasing the capacity as well,” he said.

Malaysia and Indonesia are LCT's principal markets, accounting for about 70% of its revenue as at end of its financial year (FY17) which ended Dec 31, 2017. The remaining 30% came from China, the Indian subcontinent, and other Southeast Asian countries at 10% each. 

Shares in LCT closed two sen or 0.32% up at RM6.23 today, for a market capitalisation of RM14.16 billion.