DuPont targets RI and India as growth centers
JAKARTA (JP): The U.S. chemical giant DuPont Co. is targeting Indonesia and India as its future growth centers in Asia as it plans to invest over US$2 billion in and generates 20 percent of its global sales from the Asia Pacific region by 2000.
DuPont president and chief executive officer John A. Krol said here yesterday that his company is now seeking new growth areas because its traditional markets, such as North America, are growing at a rate of less than 5 percent per annum.
"We have to find new areas in which to grow... Now the question is where our growth will come from. And it is obvious that this area is the fastest growing region in the world. So, we will focus our investment here," Krol said.
He said his travel to Asia has confirmed his belief that Asia could serve as the company's future growth center and he picked India and Indonesia as the potential bases in Asia.
India, he said, has been liberalizing its economy for six years and is now actively attracting foreign investment to fuel its economic growth.
Indonesia, on the other hand, continues to pursue an open- market liberalization policy and offer a very good opportunity for DuPont to serve both its domestic and Southeast Asian markets, Krol said.
He played down any suggestion that his company should eventually abandon Indonesia, considering that the country's current and near future political situation is not supportive for new investment.
"I don't worry about that (the political risk of investing here) as people I have met here told me that succession will take place smoothly and whatever happens to the government in power, the liberalization of its economy will continue," Krol said.
DuPont has been in Indonesia since the early 1970s when its oil and gas arm Conoco Indonesia Inc. secured a production- sharing contract from state oil firm Pertamina.
Conoco Indonesia currently produces some 100,000 barrels per day of crude oil from its fields close to the Natuna islands in Riau. Conoco Indonesia is currently conducting extensive oil explorations in the frontier areas of Irian Jaya.
DuPont's other interests in Indonesia include PT Peroksida Indonesia Pratama in Bekasi, West Java, which produces hydrogen peroxide, and PT DuPont Agricultural Products Indonesia in Sidoarjo, East Java, which produces herbicides.
Krol said that sales in the Asia Pacific region, where the company has operations in 15 countries, have been expanding by 20 percent annually and exceeded US$3.5 billion in 1995.
The region now accounts for only 7 percent of DuPont's global sales but the company hopes to raise this portion to 20 percent, or $9 billion, by 2000, Krol said.
Half of DuPont's global sales, which totaled $42 billion in 1995, are now generated outside North America.
With sales in North America growing at just 4 to 6 percent annually, two-thirds of DuPont's revenues are expected to be generated in other regions within the next 10 years, Krol said.
DuPont's principal businesses are chemicals, fibers, petroleum and agricultural products, electronics and imaging systems. It is also involved in aerospace, apparel, automotive, construction, packaging and transportation activities.
DuPont's best known products include Teflon, SilverStone and Lycra. (rid)