1. ADHESIVE RESIN INDUSTRY ATTRACTING FEW NEW INVESTORS DUE TO POOR PERFORMANCE OF PLYWOOD INDUSTRY.
Thermosetting adhesive industry began to grow in keeping with the growth of plywood industry. These plants are scattered in various regions, especially in centers of plywood industry. Until now, there are 32 thermosetting adhesive manufacturers, of which 16 are located in Kalimantan and 8 in Sumatera. The rest is scattered in Java, Maluku and Irian Jaya. Of these manufacturers, 25 are integrated with plywood industry and other wood-based industry.
Until 1995, Indonesia's adhesive/formaldehyde resin production capacity was 1.8 million tons a year. The biggest plant was PT Gelora Citra Kimia which was Capable of producing 124,000 tons of formaldehyde resin a year. This PMDN company is located in Barita Kuala, South Kalimantan. Among foreign companies, the biggest was PT Duta Pertiwi Nusantara which was located in Ponti-anak, West Kalimantan, capable of producing 75,000 tons of formaldehyde resin a year.
Table - 1
Adhesive/Formaldehyde Resin Production by Manufacturer
(Tons/year) Manufacturer Location Status - Arjuna Utam Surabaya, PMA Kimia, PT East Java - Austral Byna, Banjarmasin, PMDN PT South Kalimantan - Batu Penggal Samarinda, PMDN Chemical East Kalimantan Industry, PT - Benua Multi Potianak, PMDN Lestari, PT West Kalimantan Binajaya Barito Kuala, PMDN - Rodakarya, PT South Kalimantan - Cakram Utama Tenggarong, PMDN Jaya, PT East Kalimantan - Dover Chemical, Serang, PMA PT West Java - Duta Pertiwi Pontianak, PMA Nusantara, PT West Kalimantan - Dyno Mugi Langsa, PMA Indonesia, PT East Aceh - Gelora Citra Barito Kuala, PMDN Kimia, PT South Kalimantan - Giat Ultra Barito Kuala, PMDN Chemical South Kalimantan Industrial, PT - Intan Wijaya Banjarmasin, PMDN Chemical, PT South Kalimantan - Kayu Lapis Kendal, PMDN Indonesia, PT Central Java - Korindo Abadi, Tanjung Pinang, PMA PT - Korindo Ariabima Pangkalan Bun, PMA Sari, PT Central Kalimantan - Kurnia Kapuas Pontianak, PMDN Utama Glue West Kalimantan Industries, PT - Lakosta Indah, Samarinda, PMDN PT Eat Kalimantan - Pamolite Probolinggo, PMD Adhesive East Java Industry, PT - Perawang Pekanbaru, PMDN Perkasa Riau Industri, PT - Raja Garuda Besitang Langkat, PMDN Mas Glue, PT North Sumatera - Sabak Indah, PT Muara Sabak, PMDN Jambi - Susel Prima, PT Palembang, PMDN Permai, PT South Sumatera - Superin, PT Medan, PMDN North Sumatera - Tecwin Jaya Balikpapan, PMDN Development, PT East Kalimantan - Wiranusa Pulau Mangole, PMDN Trisatrya, PT Ambon, Maluku Others Total formaldehyde resin formaldehyde resin (Tons/year) Manufacturer Type of Product Capacity - Arjuna Utam - UF, PF, UMF, PB 37,000 Kimia, PT - Latex based adhesive 2,000 - Hardener 1,540 - Austral Byna, - UF, PF 20,000 PT - Batu Penggal - UF, PF 36,000 Chemical 36,000 Industry, PT - Benua Multi - UF, PF 95,000 Lestari, PT Binajaya - Melamine formaldehyde 9,000 - Rodakarya, PT - UF, PF 44,000 - Cakram Utama - UF, PF 60,000 Jaya, PT - Dover Chemical, - Formaldehyde resin 40,000 PT - Latex & Synthetic 12,000 resin disp - Duta Pertiwi - UF, PF, UMF, PB 75,000 Nusantara, PT - Dyno Mugi - UF, PF 31,000 Indonesia, PT - Gelora Citra - UF, PF, MF 124,000 Kimia, PT - Giat Ultra - Phenol formaldehyde 40,000 Chemical Industrial, PT - Intan Wijaya - Formaldehyde resin 60,000 Chemical, PT (UFR, MFR, PFR, LFE) - Kayu Lapis - Formaldehyde resin 28,000 Indonesia, PT - Korindo Abadi, - Urea resin 7,000 PT - Phenol/Melamine 4,000 - Korindo Ariabima - Fromaldehyde resin 24,000 Sari, PT - Kurnia Kapuas - Formaldehyde resin 54,000 Utama Glue Industries, PT - Lakosta Indah, - UF, MF, PF 40,000 PT - Hardener 1,278 - Pamolite - Formaldehyde resin 72,000 Adhesive Industry, PT - Perawang - UF Particle board 7,500 Perkasa - UF, MF, PF 69,000 Industri, PT - Raja Garuda - UF, PF, MF 41,250 Mas Glue, PT - Sabak Indah, PT - UF, PF 60,000 - Susel Prima, PT - UF liquid 25,000 Permai, PT - UF powder 10,000 - PF 14,000 - Superin, PT - Formaldehyde & 48,000 Formaldehyde resin - Tecwin Jaya - Formaldehyde resin 20,000 Development, PT - Wiranusa - Resin (UF, PF, MF) 106,000 Trisatrya, PT Others 446,136 Total formaldehyde resin formaldehyde resin 1,799,704
- UF (urea formaldehyde)
- PF (phenol formaldehyde);
- MF (melamine formaldehyde);
PMDN = Domestic Investment
PMA = Foreign Investment
Source: Department of Industry and Trade/Data Consult
One new formaldehyde resin project
Since 1995 to July 1997, BKPM issued only one approval for a new project in adhesive/formaldehyde resin industry, and one new project for producing its feedstock (formaldehyde). The new project which is scheduled to operate this year is PT Wahana Catur Mas located in Jambi. It cost Rp 85 billion investment to produce 75,000 tons of formaldehyde resin a year and 60,000 tons of formaldehyde a year. Another new project which will produce 21,000 tons of formaldehyde a year is PT Mambarami Kimia at Yapen, Irian Jaya, with Rp 18.19 billion investment.
Expansion projects will be carried out by PT Intan Wijaya Chemical, PT Pamolite Adhesive Industri and PT Gelora Citra Kimia Abadi. Viewed from its production realization, the utilization of capacity by these three companies has been full-capacity that they needed new machines. Of the three expansion projects, the largest will be made by Gelora Citra Kimia Abadi with Rp 8 billion investment that by increasing 75,000 tons of formaldehyde resin to its production capacity its total capacity will be 199,000 tons, thus asserting its position as the country's largest manufacturer in the country.
Table - 2
New Investment in Formaldehyde and Adhesive/Formaldehyde Resin Approved by BKPM, 1995 - July 1997
Production capacity Name of company Location Status (tons/year) New projects: -Wahana Catur Jambi, PMDN UF 42,000 Mas, PT Jambi PF 26,000 MF 7,500 Fd 60,000 -Mamberamo Kimia Yapen, PMDN Fd 21,000 Industri, PT Irian Jaya Expansion projects: -Intan Wijaya Banjarmasin, PMDN UF powder Chemical South 6,600 Industry, PT Kalimantan -Pamolite Adhesive Probolinggo, PMA UF/PF/NF Industry, PT East Java 25,704 Formalin 18,000 -Gelora Citra Kimia Barito Kuala, PMDN UF 36,000 Abadi, PT South PF 6,000 Kalimantan HF 10,000 Fd 36,000 Investment License/ Commencement commitment definite of Name of company (Rp'mill.) BKPM operation New projects: -Wahana Catur 85,000 1995 1997 Mas, PT -Mamberamo Kimia 18,192 1996 1999 Industri, PT Expansion projects: -Intan Vijaya 6,619 1995 1997 Chemical Industry, PT -Pamolite Adhesive Industry, PT US$ 1.7 mill. 1995 1998 -Gelora Citra Kimia 8,000 1995 1998 Abadi, PT
Note: - Fd (formaldehyde)/basic material;
Source: BKPM = Investment Coordinating Board/Data Consult;
PMDN = Investment Coordinating Board
PMA = Foreign Investment
Average production growth 8.5%
Although plywood industry tends to slow down, thermosetting adhesive production grew fairly well. At least in the last six years (1991-1996), the average growth rate was 8.5% due to the growth of wood panel industry like particle board and block board industries, etc, which consume more adhesive resin per cubic meter than ordinary plywood. Consumption by wood panel industry has contributed the growth in consumption of such adhesive.
Table - 3
Thermosetting Adhesive Production in Indonesia
Volume Change Year ('000 tons) (%) 1991 837.7 - 1992 975.6 16.5 1993 1,024.4 5.0 1994 1,009.4 -1.4 1995 1,132.0 12.1 1996(*) 1,248.0 10.2
(*) Tentative figures
Source: AIFTA/Department of Industry and Trade/Data Consult
Capacity utilization 62.9%
Based on production capacity and realization in 1995, utilization of capacity of thermosetting adhesive production reached 62.9%. Some large manufacturers were operating in full capacity, like PT Arjuna Utama Kimia, PT Kayu Lapis Indonesia, PT Intan Wijaya Chemical, PT Gelora Citra Kimia, PT Pamolite Adhesive Industry, PT Susel Prima Permai, PT Superin and PT Tecwin Jaya Development. But many manufacturers were not operating efficiently, PT Benua Lestari which had 95,000 tons capacity a year; its realized production amounted only to 20,586 tons, which means, its utilization was only 21.7%.
Table - 4
Adhesive Resin Production by Manufacturer and Estimated Utilization of Capacity, 1995
Production Capacity (tons) utilization Producers (%) Arjuna Utama Kimia, PT 32,387 87.5 Austral Byna, PT 9,009 45.0 Batu Penggal Chemical Industry, PT 26,000 72.2 Benua Multi Lestari, PT 20,586 21.7 Binajaya Rodakarya, PT 35,079 66.2 Cakram Utama Jaya, PT 22,000 36.6 Dover Chemical, PT 24,552 61.4 Duta Pertiwi Nusantara, PT 47,305 63.1 Dyno Mugi Indonesia, PT 18,977 61.2 Gelora Citra Kimia, PT 88,227 71.2 Giat Ultra Chemical Industrial, PT 28,000 70.0 Intan Wijaya Chemical, PT 51,099 85.2 Kayu Lapis Indonesia, PT 29,914 106.8 Korindo Abadi, PT 7,000 63.6 Korindo Ariabima Sari, PT 16,000 66.6 Kurnia Kapuas Utama, PT 50,157 92.9 Lakosta Indah, PT 27,000 67.5 Palmolite Adhesive Industry, PT 65,000 90.2 Perawang Perkasa Industri, PT 53,000 69.3 Raja Garuda Mas Glue, PT 25,320 61.4 Sabak Indah, PT 36,000 60.0 Susel Prima Permai, PT 46,168 94.3 Superin, PT 40,430 84.2 Tecwin Jaya Developement, PT 19,150 95.8 Wiranusa Trisatrya, PT 44,413 41.9 Lain-lain 269,227 60.3 Total 1,132,000 62.9
Source: Department of Industry and Trade/Data Consult
Plywood industry absorbs 615,000 tons of adhesive
Although plywood production in the last six years grew only by 2.4% a year, consumption of thermosetting adhesive for plywood remained high. It was estimated that in 1996 plywood industry absorbed approximately 615,000 tons, which was down 10.3% from that of the previous year's 686,000 tons. One ton thermosetting adhesive is used to produce 13.3 cubic meters of plywood.
Table - 5
Plywood Production and Estimated Consumption Thermosetting Adhesive, 1991 - 1996
Production of Consumption of plywood ([M.sup.3]) thermosetting adhesive Year ('000 tone) 1991 9,124,600 686.1 1992 9,023,000 678.4 1993 9,206,700 692.2 1994 8,006,400(*) 602.0 1995 9,122,401(*) 686.0 1996 8,178,655 614.9
(*) Data corrected
Note: Excluding adhesive for decorative playwood and particle board
Source: Apkindo/Department of Forestry/Data Consult3
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|Comment:||1. ADHESIVE RESIN INDUSTRY ATTRACTING FEW NEW INVESTORS DUE TO POOR PERFORMANCE OF PLYWOOD INDUSTRY.|
|Publication:||Indonesian Commercial Newsletter|
|Date:||Sep 8, 1997|
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