Tri Polyta to produce specialty chemicals

Tri Polyta to produce specialty chemicals

JAKARTA (JP): The country's biggest polypropylene resins
producer, PT Tri Polyta, received approval from its shareholders
yesterday to raise US$200 million to finance its diversification
project this year.

"We will set up a plant to produce specialty chemicals in
cooperation with our international partners in order to stabilize
our performance," Tri Polyta's vice president, Henry Pribadi,
said after the company's annual general shareholders meeting.

Henry, who chaired the meeting in place of Tri Polyta's
president Sudwikatmono, said that polypropylene prices on the
global market are volatile.

"Price fluctuations can easily affect the company's
performance. Therefore, we need other products with more stable
prices," Henry said.

He said that the company has signed a letter of intent with
Nippon Shokubai Co. Ltd. and Tomen Corporation, both Japanese, to
set up a joint venture for the production of acrylic acid and
acrylic ester.

The venture company will be 50 percent owned by Tri Polyta, 45
percent by Nippon and the remaining 5 percent by Tomen.

Tri Polyta's executive president for sales and marketing,
Markus Hartanto, said that in addition to the two new products,
Tri Polyta will also produce OXO-alcohol, a feedstock for acrylic
ester production.

"We will become the first OXO-alcohol producer in the
country," he added.

The new venture will construct its plant adjacent to Tri
Polyta's existing site in Cilegon, West Java, with a production
capacity of 100,000 metric tons of acrylic acid and acrylic ester
per annum. The plant is expected to commence commercial
production in March 1998.

Henry did not reveal investment figures for the new project.

"The most important thing is approval from the shareholders.
As a public company now listed on the New York Stock Exchange,
the company cannot make any decision without their approval," he
said.

Tri Polyta, whose shares were first listed on New York's
Nasdaq stock exchange in 1994, have been listed on the New York
Stock Exchange since March 14.

Henry announced that Tri Polyta booked Rp 64.9 billion ($25
million) in net profits last year, compared to Rp 70.8 billion in
1994, partially due to an oversupply situation in the second half
of last year.

Tri Polyta's earnings per American Depository Receipt (ADR)
also decreased from $1.50 in 1994 to $1.09 last year.

The oversupply, according to Henry, was triggered by
China's decision to cut imports of polypropylene last June.
Following China, world producers then shifted their products
destined for China to other Asian countries.

He said that China's total consumption of polypropylene is
between two million and three million metric tons per annum.

Polypropylene prices reached their lowest level of $780 per
metric ton last year, Henry said.

He said that the company's sales revenues rose 22 percent to
Rp 587 billion last year. Its local market share increased to 60
percent in the last quarter of last year from 54 percent
previously.

Markus said that Tri Polyta last year operated two
polypropylene resin production units with a capacity of 210,000
metric tons per annum.

"The completion of the third production unit at the end of
last year will allow us to produce up to 340,000 metric tons this
year," Markus added.

He said that the company will export about 15 percent of its
total production this year.

Another major decision approved by the shareholders was the
management's plan to list Tri Polyta's shares on the Jakarta
Stock Exchange (JSX) in late June.

"The Jakarta listing is expected to help Asian and domestic
investors acquire Tri Polyta shares. It will also allow investors
who hold American Depository Receipts to convert them into shares
through the JSX," said Henry. (08)