CIWANDAN, Indonesia—Michelin is planning to set up a joint venture in Indonesia with P.T. Petrokimia Butadiene Indonesia, a local producer of butadiene, to build a synthetic rubber plant there to support its growing operations in Asia.
Michelin said it will own 55 percent of the as-yet unnamed joint venture company, which will oversee the project.
The partners estimate they would invest $435 million through 2017 to build the plant, but they did not say which type or types of synthetic rubber would be produced nor what the plant's planned capacity would be.
PBI's parent, P.T. Chandra Asri Petrochemical Tbk., however, already produces styrene, which together with butadiene are the building blocks for styrene-butadiene rubber, the key tire polymer.
Michelin said the investment is in line with the high growth of the auto industry in newly emerged countries and the global trend toward more performance requirements from tires.
The tire maker describes Chandra Asri Petrochemical as Indonesia's largest vertically integrated petrochemical company.
Pending the partners' final decision on the investment, Michelin said plant construction would start in early 2015, with completion and start-up targeted for the beginning of 2017.
The industry's demands on tires require SR types that are more technologically advanced and environmentally friendly, according to Michelin.
PBI is building Indonesia's first butadiene plant, at the Chandra Asri Petrochemical complex in Ciwandan. The $150 million, 100,000 metric-ton-per-year plant is due on stream next month.
Parent firm Chandri Asri runs the only naphtha cracker in Indonesia—producing ethylene, propylene, crude C4, pyrolysis gasoline, polyethylene, polypropylene and styrene monomer for Indonesian and regional export markets.
If the project goes forward, the plant would be Michelin's third SR plant. It also operates SR capacity at plants in Bassens, France, and Louisville, Ky.