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1. ADHESIVE RESIN INDUSTRY ATTRACTING FEW NEW INVESTORS DUE TO POOR PERFORMANCE OF PLYWOOD INDUSTRY.



Adhesive/formaldehyde resin resin, any of a class of amorphous solids or semisolids. Resins are found in nature and are chiefly of vegetable origin. They are typically light yellow to dark brown in color; tasteless; odorless or faintly aromatic; translucent or transparent; brittle, fracturing  (thermosetting thermosetting,
adj having the property of becoming irreversibly rigid or hardened with the application of heat. In dentistry the term is used in connection with resins.
 adhesive adhesive, substance capable of sticking to surfaces of other substances and bonding them to one another. The term adhesive cement is sometimes used in place of adhesive, especially when referring to a synthetic adhesive. ) industry is attracting less interest from new investors as evident from the approval given by Coordinating Board of Investment BKPM BKPM Badan Pengawasan Pasar Modal (Indonesian investment coordinating board)  in 1995, which numbered only three new investors and three expansion projects. The little interest for new investment in this industry is due to the sluggish performance of plywood plywood, manufactured board composed of an odd number of thin sheets of wood glued together under pressure with grains of the successive layers at right angles. Laminated wood differs from plywood in that the grains of its sheets are parallel.  industry which is the biggest consumer of adhesive resin. In the last six years (1991-1996) annual plywood production increased by only 2.2% and a 13% decrease in 1994.

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 Kalimantan: see Borneo.  and 8 in Sumatera. The rest is scattered in Java, Maluku Maluku: see Moluccas, Indonesia.  and Irian Jaya Irian Jaya, province, Indonesia: see Papua. . 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 formaldehyde (fôrmăl`dəhīd'), HCHO, the simplest aldehyde. It melts at −92°C;, boils at −21°C;, and is soluble in water, alcohol, and ether; at STP, it is a flammable, poisonous, colorless gas with a suffocating  resin a year. This PMDN PMDN Penanaman Modal Dalam Negeri  company is located in Barita Kuala, South Kalimantan South Kalimantan (Indonesian: Kalimantan Selatan often abbreviated to Kalsel) is a province of Indonesia. It is one of four Indonesian provinces in Kalimantan - the Indonesian part of the island of Borneo. The provincial capital is Banjarmasin. . Among foreign companies, the biggest was PT Duta Pertiwi Nusantara which was located in Ponti-anak, West Kalimantan West Kalimantan (Indonesian: Kalimantan Barat often abbreviated to Kalbar) is a province of Indonesia. It is one of four Indonesian provinces in Kalimantan, the Indonesian part of the island of Borneo. Its capital city Pontianak is located right on the Equator line. , 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



Note:

- UF (urea formaldehyde)

- PF (phenol phenol (fē`nōl), C6H5OH, a colorless, crystalline solid that melts at about 41°C;, boils at 182°C;, and is soluble in ethanol and ether and somewhat soluble in water.  formaldehyde);

- MF (melamine melamine (mĕl`əmēn'), common name for 2,4,6-triamino-1,3,5-triazine. Melamine is a trimer (see polymer) of cyanamide, H2NC≡N, and is synthesized from calcium carbide.  formaldehyde);

PMDN = Domestic Investment

PMA PMA (papillary-marginal-attached),
n a system of epidemiologic scoring of periodontal disease devised by Schour and Massler in which the symbols denote the areas involved in gingival inflammation.

PMA Progressive muscular atrophy
 = Foreign Investment

Source: Department of Industry and Trade/Data Consult

One new formaldehyde resin project

Since 1995 to July July: see month.  1997, BKPM issued only one approval for a new project in adhesive/formaldehyde resin industry, and one new project for producing its feedstock feed¬∑stock ¬†
n.
Raw material required for an industrial process.

Noun 1. feedstock - the raw material that is required for some industrial process
raw material, staple - material suitable for manufacture or use or finishing
 (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 particle board: see composition board.  and block board industries, etc, which consume more adhesive resin per cubic meter Noun 1. cubic meter - a metric unit of volume or capacity equal to 1000 liters
cubic metre, kiloliter, kilolitre

metric capacity unit - a capacity unit defined in metric terms
 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 tentative,
adj not final or definite, such as an experimental or clinical finding that has not been validated.
 figures

Source: AIFTA/Department of Industry and Trade/Data Consult

Capacity utilization Capacity Utilization measures the rate at which a firm makes use of their capital productive capacities, such as factories and machinery. Capacity Utilization generally rises when the economy is healthy and falls when demand softens.  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 Arjuna

One of the five brothers who are the heroes of the Mahabharata. His reluctance to go into battle prompts Krishna, manifested as his friend and charioteer, to deliver the discourse on duty that constitutes the Bhagavadgita.
 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
COPYRIGHT 1997 P.T. Data Consult, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1997 Gale, Cengage Learning. All rights reserved.

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Comment:1. ADHESIVE RESIN INDUSTRY ATTRACTING FEW NEW INVESTORS DUE TO POOR PERFORMANCE OF PLYWOOD INDUSTRY.
Publication:Indonesian Commercial Newsletter
Geographic Code:9INDO
Date:Sep 8, 1997
Words:1732
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