BASF doubles polymer dispersion capacity
Tony Hotland, Jakarta
Chemical producer PT BASF Indonesia will double the annual production of its polymer dispersion to 95,000 tons with the total new investment reaching 10 million euros (US$12.34 million).
"This is a sign of our commitment to Indonesia despite ongoing glitches in the economic and political situations. We believe that Indonesia will overcome these problems," the president of Southeast Asia BASF, Harald Lauke, said on Wednesday.
Polymer dispersion is a chemical substance used in the manufacture of paint, paper, textiles, glue and materials used in the construction industries. Its main raw material is water.
With production doubling, the firm projected its sales would grow by 16 percent this year.
The company sees the prospect of an improving economy in Indonesia and the Southeast Asian region with the establishment of a free trade area among the members of the Association of Southeast Asian Nations (ASEAN). This is expected to result in increased demand for chemical products both in Indonesia and the region.
"Indonesia needs at least 200,000 tons of polymer dispersion per year. We also plan to export it and other chemical products to China and India because we project that these two countries will have bigger chemical market shares by 2015," said BASF Indonesia president Danny Jozal.
BASF Indonesia currently has a plant in Cengkareng and one in Cibitung. The company made a profit of 146 million euro in 2003 -- a 16 percent decrease over 2002 due to the stronger euro vis-a-vis the U.S. dollar and the increasing prices of raw materials.
Besides polymer dispersion, the company also produces colorants, and vitamin and mineral premixes for animal nutrition, as well as liquid and powder pesticides.
It has more than 670 consumers, with a 35 percent market share for the commodities in Indonesia.
Globally, the BASF group produces around 8,000 products, 97 percent of which are chemical products. Its main investment locations in the Asia Pacific region are China, Malaysia and Singapore.
The German-based group earned 33 billion euro in revenue last year with its biggest market being Europe. It has invested up to $60 million in Indonesia.
Established in Indonesia in 1977, it initially operations were confined to tape and cassette manufacturing. The company later expanded into various other chemical fields, mainly polymer dispersion and process chemicals.
In January 1997, the group withdrew from the tape and cassette manufacturing business worldwide to concentrate more on its chemical products.