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Indonesia's largest sheet glass producer PT Asahimas Flat Glass Co. Ltd. will use more of its production capacity to turn out high-quality glass products--e.g. specialty glass and fabricated glass--on a gradual basis. This plan has been made in view of the growing demand for such glass products and because such glass products have higher value added than other sheet glass products.

With the support of glass products with high value added, Asahimas expects its exports to soar by 34% in 1997, as compared to only 28.5% in 1996. Among the new glass products, which will be exported, is the new generation mirror, which Asahimas will start to produce using the Glaverbel technology of Belgium in August 1997. In addition, Asahimas will also start to produce eurogrey and ultra flat glass products in August 1997.

The glass products of Asahimas which are commonly used by the property sector are as follows: penasap green, grey, blue, euro grey, stopsol green, and multi-layer safety glass products. Asahimas supplies its products not only to the free market but also to 20 property projects currently underway in the areas of Jabotabek (Jakarta-Bogor-Tangerang-Bekasi) and Surabaya. These projects are, among others, as follows: the Peninsula Hotel, the Senayan Hotel, the Marcopolo Hotel, the Matahari Tower, Puri Kemayoran Apartments, Oceania Apartments, the Duta Mas Shophouses, and the Pinangsia Shophouses.

For 1997, Asahimas expects an increase in sales not only of its high-quality glass products for the property sector but also of its safety glass products for the automotive sector. Over the last few months, the company's sale of automotive safety glass products has hiked because of an increased demand from, among others, Toyota Kijang of the latest generation.

Since April 1997, Asahimas has been supplying 1,000-2,000 tons of safety glass products per month to the Timor National Car. Asahimas has been supplying all the demand of the Timor National Car for safety glass products except for the rear glass, which the former will start supplying to the latter in October. Apart from this, Asahimas is also a supplier of safety glass products to BPPT (the Agency for the Study and Application of Technogy) for its prototypes of the Maleao National Car as well as to the Bakrie Group for its National Car products. In view of this, Asahimas has been able to project the sales growth of its automotive safety glass products at 27% for 1997, which is the same as the automotive sales growth projection made by Gaikindo (the Indonesian Automotive Producers' Association) for the same year.

Asahimas' Overall Net Sale Down 15.3%

For the first quarter of 1997, Asahimas recorded a net sale of Rp 82.4 billion, down 15.3% from Rp 97.3 billion from the corresponding period of last year. This decline resulted from the resumption of operations in 1995 of PT Abdi Rakyat Bakti, a sheet glass producer. With PT Abdi Rakyat Bakti back in operations, the supply of sheet glass products on the domestic market grew substantially in 1996, and this led to a price competition among producers. This had some negative impact on Asahimas' sale for the first quarter of 1997.

Of Asahimas' overall net sale for the first quarter of 1997, some 32.16% was that of commodity glass products, 34.59% high-quality glass products with certain specifications, and 33.25% glass products for further processing. For the same period, Asahimas booked a net profit of Rp 420 million. For the second quarter of 1997, Asahimas expects better sale figures, especially in view of an increase in the price of several sheet glass products which became effective in March 1997. Asahimas expects its safety glass products to contribute the most to the increase in its overall sale.

Asahimas Accounts for 65% of Total Sheet Glass Production

In 1995, Asahimas produced 376,450 tons of sheet glass products, which accounted for 66% of its installed production capacity (570,000 tons/annum). In the same year, the domestic sheet glass industry produced a total of 578,500 tons. Thus, Asahimas had a 65% share in total sheet glass production, making the company the market leader of the domestic sheet glass industry. The second largest producer of sheet glass is Mulia Glass. In 1995, Mulia Glass' production capacity utilization rate was 37.8% and its share in total domestic sheet glass production 26%.

Production Up 21.8% in 1995

In 1995, with the resumption of operations of the Medan-based sheet glass producer PT Abdi Rakyat Bakti, the other three sheet glass producers boosted their production rates in order to maintain their domestic market shares. As a result, Indonesia's total sheet glass production rose by 21.8% from 475 thousand tons in 1994 to 578.5 thousand tons. In 1996, it increased further by 12% to 647.9 thousand tons. Among the types of sheet glass which showed production growth was penasap, which is widely used by office and apartment buildings due to their architectural designs.

The rapid growth in the production of sheet glass has been made possible by the application of the float process technology by Asahimas and Mulia Glass. This technology produces better sheet glass faster. Now, PT Abdi Rakyat Bakti has also adopted this technology. So, the only sheet glass producer to apply the old fourcault process in Indonesia is PT Tensindo, whose plant is located in Semarang, Central Java.

1996's Exports 209.2 Thousand Tons

After Asahimas started to apply the float process technology and Mulia Glass commenced its commercial operations in 1992, Indonesia's sheet glass exports started to grow significantly in 1993. In 1992, the volume of such exports reached only 69 thousand tons. In 1993, it nearly doubled to 136.5 thousand tons (up 97.7%). For 1996, the volume of Indonesia's sheet glass exports was recorded at 200.2 thousand tons, up 16.7% from 179.2 thousand tons in 1995.

However, although the volume of such exports rose considerably in 1996, the value grew by only 3.7%, namely from US$ 79.6 million in 1995 to US$ 82.6 million. Similarly, in the previous years, the growth in the value of Indonesia's sheet glass exports was not comparable to that in the volume. This indicates that the export price of Indonesian sheet glass has continued to decline from year to year.

The competitive price of Indonesian sheet glass is attributable to the application of the float process technology. This technology not only improves the quality of sheet glass products but also keeps down production cost. The float process technology can produce sheet glass products with a thickness of up to 19 mm. It reduces shutdown time and, hence, increases output. It is also fuel-economical because with this technology, the consumption of fuel for the warming-up of the drawing pit while the drawing machine is not in operations is low.

Imports Up

In 1990, the volume of Indonesia's sheet glass imports reached only 2,560 tons. In the following years, it kept on growing. In 1995, it reached 38,331 tons, up 58.3% from 24,208 tons in 1994. In 1996, however, the volume of such imports declined due to an increase in the domestic production of high-quality sheet glass products as import substitutes.

One major reason for the high growth in the volume of such imports in 1992-1995 was the rapid development of office and apartment buildings, which used large quantities of high-quality sheet glass products due to their architectural designs.

Table - 1

PT Asahimas Flat Glass' output, 1992- 1995
Year Output
 Sheet glass Safety glass
 (tons) ([m.sup.2])

1992 281,090 909,195
1993 269,000 900,000
1994 300,000 1,215,000
1995 376,450 1,446,000

Source: Department of Industry and Trade/Data Consult

Table - 2

PT Asahimas Flat Glass' sales volume, 1992 - 1995
Year Domestic sales Exports
 Sheet glass Safety glass Sheet glass Safety Glass
 (tons) ([m.sup.2]) (tons) ([m.sup.2])

1992 205,540 901,417 76,200 779
1993 181,000 822,000 63,000 6,000
1994 205,000 1,174,000 65,000 4,000
1995 244,000 1,404,000 108,900 6,000

Source: Department of Industry and Trade/Data Consult

Table - 3

Production capacities, capacity utilization rates, and actual production of Indonesian sheet glass producers, 1995
Producers Production Capacity
 capacity utilization
 (tons) (%)
 per annum

PT Asahimas Flat 570,000 66.0
PT Tensindo 160,000 20.2
PT Mulia Glass 400,000 37.8
PT Abdi Rakyat 120,000 15.5

Total 1,250,000 46.3

Producers Actual Share in
 production total
 (tons) (%)
 per annum

PT Asahimas Flat 376,450 65.0
PT Tensindo 32,280 5.8
PT Mulia Glass 151,127 26.0
PT Abdi Rakyat 18,643 3.2

Total 578,500 100.0

Source: Department of Industry and Trade/Data Consult

Table - 4

Indonesia's sheet glass production, 1991 - 1996
Year Production Growth
 (tons) (%)

1991 373,690 -
1992 413,840 10.7
1993 429,000 3.7
1994 475,000 10.7
1995 578,500 21.8
1996(*) 647,900 12.0

(*) Tentative figures

Source: Department of Industry and Trade/Data Consult

Table - 5

Indonesia's sheet glass exports by type, 1992 - 1995
Type of sheet glass 1992 1993 1994

- Plate glass 110 38 53
 183 62 80

- Other plate glass 1,209 512 1,112
 1,869 727 1,142

- Profile cast glass - 11 -

- Float glass non 43,710 79,214 47,758
 wired glass cut 12,880 22,342 13,202

- Other float glass 694 89 148
 non wired glass 245 30 101

- Float glass other 18,536 27,816 58,095
 non wired glass 5,510 10,034 22,372
 color throughout
 the mass cut shape

- Other float glass 617 37 4
 other non wired glass 156 17 10
 color throughout
 the mass rectangular

- Float glass other 97 176 238
 non-wired glass not 157 326 409
 coloured cut to shape

- Mirror glass 539 2,998 5,475
 324 1,948 3,613

- Other sheet glass 4,135 25,592 12,589
 4,157 6,922 10,667

Jumlah 68,953 136,483 125,472
 25,236 42,418 51,596

Type of sheet glass 1995 1996

- Plate glass 90 5,104
 74 5,292

- Other plate glass 1,540 482
 1,628 518

- Profile cast glass - 36

- Float glass non 56,274 70,020
 wired glass cut 17,571 17,014

- Other float glass 11 19,222
 non wired glass 25 5,301

- Float glass other 100,348 47,935
 non wired glass 43,309 19,272
 color throughout
 the mass cut shape

- Other float glass 227 52,263
 other non wired glass 89 21,819
 color throughout
 the mass rectangular

- Float glass other - -
 non-wired glass not 2
 coloured cut to shape

- Mirror glass 8,671 7,451
 6,221 7,340

- Other sheet glass 12,020 6,651
 10,744 6,006

Jumlah 179,181 209,164
 79,663 82,566

Source: Central Bureau of Statistic/Data Consult

Table - 6

Indonesia's sheet glass imports, 1992 - 1996
Year Volume Volume
 (tons) (US$'000)

1992 6,343 5,719
1993 14,224 11,434
1994 24,208 13,081
1995 38,331 18,831
1996 32,076 19,957

COPYRIGHT 1997 P.T. Data Consult, Inc.
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Publication:Indonesian Commercial Newsletter
Date:Aug 11, 1997

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