Humpuss Aromatic needs no protection<\/p>\n
JAKARTA (JP): PT Humpuss Aromatik, a subsidiary of the
\npolitically well-connected Humpuss Group, said yesterday it would
\nnot seek government protection provided that no dumping practices
\noccur.<\/p>\n
The company's president, R. Soejatno, said yesterday that the
\ncompany would be able to compete with foreign aromatic producers
\nwithout government assistance as long as they compete fairly
\nhere.<\/p>\n
\"I'm sure we can compete even without government protection,
\nbecause we have established this company without any assumption
\nof government protection for our products,\" Soejatno told
\njournalists.<\/p>\n
However, he declined to state clearly whether his company will
\nseek tariff protection, saying that the decision lies with the
\nshareholders.<\/p>\n
Soejatno made the remark in response to concerns expressed by
\nindustries working at the downstream level about the possibility
\nof the company seeking government protection when its aromatic
\nplant in Arun, Aceh begins producing paraxylene and benzene in
\n1998.<\/p>\n
Both paraxylene and benzene are much needed by downstream
\npetrochemical plants. Paraxylene is the material for making
\npurified terephthalic acid, which is a basic material used in the
\ntextile industry.<\/p>\n
Such concerns are not groundless, especially since the
\ngovernment broke its promise by protecting other upstream
\nchemical products, the olefins.<\/p>\n
Last February, the government established a temporary 20
\npercent duty surcharge on imports of ethylene and propylene on
\ntop of a 5 percent import tariff. Then, last month, the
\ngovernment turned the temporary measure into a permanent one by
\nincorporating the surcharge into the tariff structure.<\/p>\n
Both ethylene and propylene are produced by PT Chandra Asri
\nPetrochemical Center, which is believed to have strong political
\nconnections.<\/p>\n
Moreover, Minister of Industry and Trade Tunky Ariwibowo said
\nlast week that the government might use the protection scheme it
\nhas granted to Chandra Asri to help other infant industrial
\ncompanies.<\/p>\n
Dino M. Vega, another executive at the Humpuss Group, noted
\nthat government protection for upstream chemical industries
\nshould not be considered as a taboo, considering that advanced
\ncountries like Japan and South Korea also protected their
\nchemical industries.<\/p>\n
\"They have even established a 60 percent tariff protection for
\ncertain chemical products,\" said Dino, a former planning director
\nat holding firm PT Humpuss and now president of PT Humpuss
\nPatragas and PT Humpuss Karbomethil Selulosa.<\/p>\n
Dino said that although Humpuss Aromatik is designed to
\ncompete without government protection, the company will not stand
\ncompeting with foreign producers when the latter conduct dumping
\npractices here.<\/p>\n
\"It is very often that established chemical companies form a
\ncartel to block the entrance of newcomers to the market and force
\nthem out by dumping,\" he said.<\/p>\n
The US$800 million aromatic plant in Arun is designed for an
\nannual capacity of 370,000 tons of paraxylene and 160,000 tons of
\nbenzene.<\/p>\n
The country's need for paraxylene, which is currently
\nestimated at approximately 240,000 tons per year, is expected to
\nincrease to 650,000 tons in the year 2000.<\/p>\n
The plant, slated to come onstream in 1998, will require
\n70,000 barrels of condensate a day from the Arun gas field.<\/p>\n
Currently, the import tariff on both paraxylene and PTA is set
\nat 0 percent. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/humpuss-aromatic-needs-no-protection-1447893297",
"image": ""
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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