April 26, 2024

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[THE INVESTOR] Lotte Chemical’s Indonesian project will be larger than expected as it has announced plans to acquire a local ABS manufacturer, said NH Investment and Securities on Dec. 22, maintaining a “buy” recommendation and 550,000 won (US$509.45) target price. 

This signals that investments in the Southeast Asian country are expanding, and targets areas other than a site for a factory. Its position in the region will be stronger than estimated, said analyst Hwang Yu-sik.

Lotte has acquired PT ABS Industry, which suspended operations in October due to a deteriorating business, and the Korean firm will restore and expand the manufacturing facility to raise the capacity up to 73,000 tons a year from the current 40,000 tons, according the analyst.

Lotte Chemical will invest 4 trillion won in Indonesia to build a mega chemical complex that will include naphtha cracking center and polymer facilities, and as PT ABS Industry is located about 10 kilometers from the new site, the two could be closely aligned, noted Hwang. 

By Hwang You-mee (glamazon@heraldcorp.com)