After consolidating its position in Europe and the US, Indorama Ventures Plc (IVL) is setting its sights on expanding its Asian operations, beginning with Indonesia.

"Our aim is to grow in Indonesia, as it is the fastest-growing market in the region behind China and India," said Aloke Lohia, chief executive of the world's largest producer of polyethylene terephthalate (PET).

Indonesia, the largest economy in the 10-member Asean grouping, has been a focus of international investors in recent years after making impressive strides forward, and many are now looking to make major investments in the country.

The Indonesian economy is expected to surpass the government's initial forecast on the back of a surge in direct investment and exports as well as household spending. Expectations are that growth in Indonesia's gross domestic product will range between 6.8% and 7%, higher than the government forecast of 6.4%.

Indonesia's economy grew by 6.5% in the first quarter thanks mainly to rising exports, investment and household spending.

Last year, cumulative realised investment rose by 54.5% to 208.9 trillion rupiah (740 billion baht) from 135.2 trillion in 2009. Foreign direct investment contributed 70% of the total investment realisation last year. It grew by 11.6% year-on-year in this year's first quarter to 39.5 trillion rupiah, according to data from the Investment Coordinating Board.

The agency said it expected this year's total realised investment to increase by almost 15% to 240 trillion rupiah.

"We want a leadership position in Indonesia like we have in other markets," said Mr Lohia, referring to IVL's control of one-third of the PET market in Europe and the US.

IVL recently acquired Indonesian assets with annual capacity of 86,000 tonnes for PET and 110,000 tonnes for polyester fibre.

Meanwhile, Indonesia's overall PET capacity stands at 415,000 tonnes with a 95% utilisation rate from 2010-11. The country also has a purified terephthalic acid (PTA) capacity of 1.5 million tonnes with an 87% utilisation rate last year.

Indonesian PET and PTA producers were sent reeling from the impact of the economic crisis, and some plants are actually being operated by their creditors. This stands to give IVL an edge in acquiring the assets and making them run at more than 100% capacity, something it has achieved elsewhere.

"Indonesia is a large market with a very big population, and we have plans to grow in a big way there through expansion," said Mr Lohia.

IVL has nearly US$1.8 billion in its war chest for acquisitions and expansion. It is now considering the possibility of exporting excess Thai PTA capacity to Indonesia for use in expansion there. Its PTA capacity in Thailand alone totals 1.25 million tonnes.

The company also wants to add value to its products, and Mr Lohia said the acquisition of Germany's Trevira and its fibre and textile products could help the company see greater margins added to its own products.

Besides Indonesia, the focus will be on India, China and the Middle East, and IVL is expecting something positive to happen in the Indian and Middle East markets soon.

Commenting on the upcoming 3.8 million tonnes of new PTA capacity in China, Mr Lohia said despite the new plants coming onstream, the outlook for that country is it will continue to be a net importer of 2.2 million tonnes.

He said the key for Asia and elsewhere is to have a constant feedstock of paraxylene, which is currently in short supply. "What the new plants have to do is get a guarantee on the paraxylene before committing to expanding production," he said.

Despite the positive outlook for demand growth in Asia, Mr Lohia warned that the continent will be the most volatile market in terms of pricing, and that is why IVL's US and European operations will likely keep the company stable.