Bayer sees more promising business in Indonesia
Bayer sees more promising business in Indonesia
By Christiani Tumelap
SINGAPORE (JP): Germany's diversified chemical and health care
manufacturer Bayer Group expects business to improve in Indonesia
following its recent expansion into the polyurethane industry.
Bayer Group has just taken over a factory producing
polyurethane raw material called polyol in Anyer, West Java,
owned by the U.S.-based Lyondell Chemical Company as part of the
group's US$2.45 billion global acquisition of Lyondell's polyol
business line.
Wolfgang Piroth, president of Bayer Group's three joint
ventures in Indonesia, said the new polyurethane business here
was expected to contribute at least 30 percent of the group's
total sales in Indonesia this year.
"Polyurethane is a new dynamic business," he told The Jakarta
Post at the group's recent regional meeting.
Piroth said the group's Indonesian units recorded total sales
of about US$170 million last year, lower than the average $230
million it obtained in the pre-crisis period.
"This year, hopefully, we'll be able to return to the pre-
crisis level of performance with help from our newly set up
polyurethane raw material business," he said.
Bayer Group currently has three joint venture companies in
Indonesia, namely PT Bayer Indonesia Tbk, PT Bayer Kimia
Farmasindo and the newly formed PT Bayer Urethanes Indonesia.
Founded in Germany in 1863, Bayer Group has production
facilities at 19 locations around the world.
It currently markets more than 10,000 product items worldwide,
ranging from pharmaceuticals and diagnostic systems through to
crop protection agents, plastics, synthetic rubber, rubber
chemicals, fibers, dyes, pigments, organic and inorganic
intermediates as well as products for information technology.
In Indonesia, the group has two pharmaceutical and consumer
care factories located in Jakarta, both managed by Bayer
Indonesia Tbk, and the newly acquired polyol plant in Anyer, West
Java, managed by Bayer Urethanes Indonesia.
Bayer Kimia Farmasindo operates solely as an importer of
chemicals and diagnostics raw materials for local chemical
manufacturers.
Bayer Indonesia Tbk, which booked a total sales of Rp 689.5
billion last year, produces its pharmaceutical and over-the-
counter medicines in its factory in Cibubur, East Jakarta.
The plant produced some 185 million tablets, 5.29 million
liquid bottles and 6 million ointment tubes last year.
The company's Pulogadung plant produces consumer care, except
for those sold over the counter, and crop protection products. It
produced 50,488 tons of consumer care products and 5,633 tons of
crop protection products last year.
The Bayer Urethanes Indonesia plant in Anyer, which is worth
at least $26 million, currently produces 32,000 tons of polyol
per year.
Polyol is the raw material used in the production of
polyurethanes, a group of foams with a wide variety of
applications -- chiefly in the electronics industry, in heat and
cold insulation, construction of technical parts, the furniture
industry and in the fields of sports and leisure.
In addition to the Anyer plant, Bayer also took over the
Lyondell Asia polyol production site in Kaohsiung, Taiwan, which
has an annual production capacity of over 40,000 tons.
In addition, Bayer took over Lyondell's two polyol plants in
the United States as well as one each in Belgium and France. All
the plants together with the two factories in Asia have an annual
capacity of some 700,000 tons of polyol.
Bayer AG's general manager for the polyurethane business
group, Hans-Joachim Kaiser, said at the regional meeting that
although Bayer's strength was in isocyanate chemistry, the
company had never had sufficient capacity to supply the two main
components of polyurethane, polyols and isocyanates.
The acquisition of Lyondell earlier this year has definitely
changed that situation, he said.
"We are now in a position to supply customers with the full
range of products, technologies and services they need for the
production of polyurethane," he said.
He said Bayer's polyurethanes business increased its sales
last year by almost five percent to 2.17 billion euros.
The acquisition will help increase the group's polyurethane
business' sales to three billion euros.
Kaiser said Bayer Group planned to significantly strengthen
its position in the Asian polyurethane raw material market
following its acquisition of the two polyol plants in Indonesia
and Taiwan.
"We hope to increase our share in Asia's polyurethane raw
material market to 25 percent in 2004 at the latest, from 10
percent at present," he said.
He said, as part of Bayer Group's plan to strengthen its
polyurethane raw material business in Asia, it would build
several new production facilities in the region.
He said the group expected to finalize one or two new projects
this year so that the new plants, which would likely have an
annual capacity in the range of 150,000 to 230,000 metric tons,
could start production in 2004.
"We also have plans to increase the production capacity of the
Anyer polyol plant by around 50 percent," Kaiser said, but he did
not give a time frame for this.