Polysindo plans to invest US800m to boost production

JAKARTA (JP): Publicly listed PT Polysindo Eka Perkasa, Indonesia's largest polyester producer, announced yesterday that it would invest US$800 million to expand its production capacity during the next five years.

The company's president Marimutu Sinivasan said the expansion program would be undertaken in two phases.

The first phase will require about $530 million and will be completed over three years starting this year. The second phase, subject to market conditions, should start in 1999 and be completed by 2001.

Sinivasan said the expansion program would increase upstream capacity to support its downstream production of fiber, yarn and fabric.

"We'll increase the production capacity of our purified terephthalic acid (PTA) plant from 360,000 tons a year to 500,000 tons, and our polymer unit from 330,000 tons to 500,000 tons," he said.

He said the company would also install new yarn production facilities at its Karawang and Semarang plants to achieve a combined annual capacity of 210,000 tons from the current 65,000 tons. It will also add a new product, high value-added polyester fleece and coated active-wear fabric with an annual capacity of 25 million yards, to increase the company's total fabric capacity to 250 million yards a year.

Sinivasan said positive industry fundamentals and strong regional and Indonesian growth decided the expansion program.

"The polyester industry has been growing 7 percent to 8 percent globally and upwards of 11 percent in our region. There is tremendous opportunity today for Polysindo to consolidate its leading position. Our goal is to become one of the top producers in our industry by the turn of the century," he said.

Polysindo, the flagship company of the Texmaco Group -- a prominent industrial group in Indonesia with more than 35 years experience in the polyester textile business --, is now one of the world's fifteen largest producers of textile polymers.

President Soeharto recently opened the company's PTA plant in Karawang, West Java, which was built with some of the $645 million it has spent on expansion since 1994.

The company uses its PTA output to feed its polymer plant, which in turn feeds its polyester staple fiber factory.

Polysindo's finance manager Gururajan said the company would get expansion funds from a variety of sources, including internally generated funds and additional equity and debt, depending on market conditions. (bnt)