Intan Wijaya to build another formalin plant in E. Kalimantan

JAKARTA (JP): PT Intan Wijaya Chemical Industry Tbk, a formalin and wood adhesives maker, will build its third formalin plant in Banjarmasin, East Kalimantan, an executive said here yesterday.

Director Recsonlye Sitorus said after the company's extraordinary shareholders meeting that Sweden's Perstop had signed a contract Tuesday to build the plant.

He said the plant was due to begin operating in 18 months and would be able to produce 180 tons of formalin a day.

Recsonlye said Rp 15 billion (US$6.13 million) was needed to build the plant. Eighty percent would be financed with a loan -- with an interest rate of 7.5 percent per annum -- from a Swedish bank and 20 percent from the company's own equity, he said.

"The plant will make the company the biggest formalin producer in Indonesia with a total daily production capacity of 380 tons of formalin and 570 tons of wood glue," he said.

Intan Wijaya used most of its formalin output to make adhesives, he said.

Intan Wijaya produces liquid glue, including urea formaldehyde, melamine, phenol and low emission resin, urea formaldehyde powder glue and blowing agent hexamine.

"Besides selling glue, we also sell between 200 tons and 250 tons of formalin a month," Recsonlye said.

He said he expected the company's net profit to increase 10 percent in 1997 from Rp 9.4 billion last year and its sales 10 percent from Rp 53.4 billion.

He said a profit increase was possible because of increases in its exports to Myanmar, Singapore, Malaysia and Sri Lanka, and new exports to Hong Kong.

This year's exports were likely to contribute about 10 percent to the company's total sales, compared to only 4.2 percent last year, he said.

He said the company would increase its glue sales for particle board, furniture, medium density fiber board and block board this year.

He said the stagnation in the country's plywood production would have a corresponding effect on its plywood glue sales.

The Association of Indonesian Wood Panel Producers has revised downwards the country's plywood production target in 1997 to 9.6 million cubic meters from 10 million cubic meters because there were not enough logs.

Yesterday's meeting approved a plan to pay a dividend of Rp 4.4 billion, or Rp 100 per share, and to issue three bonus shares for every 20 shares.

The company will then split its stock by halving its nominal value from Rp 1,000 to Rp 500 each to increase its liquidity on the capital market.

The meeting also approved delisting the company from the Surabaya Stock Exchange. It will maintain its listing on the Jakarta Stock Exchange. (13)