Polysindo plans to invest US800m to boost production

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)