BASF to close tape plant

JAKARTA (Antara): PT BASF Indonesia, a subsidiary of a German chemical company, plans to close its magnetic tape production facility on Jan. 1 in order to focus on chemical products, its chief executive announced Friday.

Danny Jozal, the company's president director, said that the closure comes as part of BASF's strategy of concentrating on its basic activities.

He added that BASF's head office in Ludwigshagen, Germany, has sold its magnetic tape division to the KOHAP Group, a giant Korean petrochemical company.

According to Jozal, BASF's main business is chemical products, while magnetic tape production, for which it is best known in Indonesia, is a side business.

Jozal said that the production and distribution of magnetic tape will be handled by KOHAP, which for the next five years is permitted to use the BASF trademark.

He added that the facility was closed because the magnetic tape business is sluggish and difficult to develop further.

The production of chemical products in Indonesia has increased 20 percent, he said. His company plans to increase the production capacity of polymer dispersant -- a substance for the leather, paper and textile industries -- from 52,000 tons to 110,000 tons per year with an additional investment of about Rp 150 billion (US$63.5 million).

This year, polymer dispersant has contributed 19.2 percent, or Rp 80 billion, of the company's total revenues which stood at Rp 416 billion.

Jozal said that magnetic tape contributed relatively little. Last year, its contribution to company's revenues was only Rp 34.7 billion, or about 8.5 percent, he added.

The BASF group's spokeswoman, Diana Weitenkopf, said in Ludwigshagen that the fate of the plant's 300 employees is still being negotiated. BASF has been producing in Indonesia since 1976 and employs about 1,100 people here.