BASF to close tape plant

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.