Lotte Chemical Indonesia secured 10-year ethylene supply deal with Asahimas Chemical
Under the terms of the agreement, LCI will supply approximately 150,000 tons of ethylene per annum to Asahimas from 1 July 2025 through 30 June 2035.
Lotte Chemical Indonesia (LCI), a subsidiary of Malaysia’s Lotte Chemical Titan Holding Bhd (LC Titan), has entered into a 10-year ethylene supply agreement with PT Asahimas Chemical, Indonesia’s largest PVC producer. The long-term contract, valued at over RM743.5 million, was formalised on 7 May 2025, according to a regulatory filing with Bursa Malaysia.
Under the terms of the agreement, LCI will supply approximately 150,000 tons of ethylene per annum to Asahimas from 1 July 2025 through 30 June 2035. Pricing will be based on prevailing market rates.
"This strategic partnership strengthens LCI’s downstream customer base and supports our long-term monetisation of cracker output in Indonesia," the company stated.
The deal aligns with LCI’s efforts to secure offtake for its newly built mixed feed cracker in Cilegon, West Java, which has a nameplate capacity of 1 million tons per year. While commercial operations were initially targeted for April 2025, the start-up has been pushed back to September or October due to continued margin pressure across the regional olefins market. Trial runs commenced in early April.
LCI also underwent a shift in ownership structure earlier this year, when South Korea’s Lotte Chemical Corporation—formerly a 49% shareholder—reduced its stake to 24% through a divestment to a consortium of five Korean financial institutions.
To improve feedstock flexibility and cost competitiveness, LCI is exploring naphtha procurement options from the Middle East. A company executive speaking at the Asia Petrochemical Industry Conference (APIC) noted that the cracker is also designed to accommodate up to 50% of its feedstock as natural gas liquids, including liquefied petroleum gas (LPG) and ethane, depending on market dynamics.
With Asahimas Chemical operating a polyvinyl chloride capacity of 750,000 tons annually, the long-term ethylene supply arrangement provides both parties with greater operational visibility and margin stability amid a structurally challenged Southeast Asian petrochemical environment.