1. EKADHARMA COOPERATES WITH JAPANESE INVESTORS IN ESTABLISHING SPUN RAYON CLOTH AND ADHESIVE TAPE PLANTS.
This US$ 14 million project is 26% owned by PT Ekadharma Tape Industries, 51% by Slintec Corp., 20% by Otoyo Shokufu Co. Ltd., and 3% by Orion Trading Co. Ltd..
Some US$ 7 million of the funds required for the project will be procured from a loan with a banking syndication, and the rest from the investors' own equity. Some US$ 12.9 million has been allocated for use as fixed capital with the following breakdown: US$ 2 million for the purchase and reclamation of land; US$ 2 million for the construction of buildings/premises; US$ 8.4 million for the purchase of machinery/equipment & parts; and US$ 600,000 for other purposes. The other US$ 1.1 million will be used as working capital.
If this project proceeds as scheduled, the company will be able to commence its trial production in the 33rd month following the issuance of the Investment Coordinating Board (BKPM) approval and to start its commercial production in July, 2000. This project is expected to absorb a manpower of 121 Indonesian nationals and 1 expatriate.
All the company's spun rayon cloth output and some 85% of its pressure sensitive adhesive tape output will be supplied to export markets. PT Sliontec Ekadharma Indonesia has projected its annual export earning at US$ 5.5 million.
Ekadharma the Largest Adhesive Tape Producer
According to data with Data Consult, there are currently at least seven adhesive tape producers operating in Indonesia with a combined production capacity of 193.4 million square meters.
Of these seven companies, the largest one is PT Ekadharma Tape Industries (63 million square meters per annum), followed by PT Sumilindo Tape Industry (41.7 million square meters per annum) and PT Kayu Mas Buana Wood (36 million square meters per annum). The other four companies have an annual production capacity of less than 20 million square meters each.
The types of adhesive tape which these companies produce are as follows: OPP packing tape, OPP printed tape, transparant tape, stationary tape, and aluminum foil tape. The last mentioned is widely consumed by households and industries for packaging and other uses.
Imports Continue to Increase
Although Indonesia produces adhesive tape, it continues to import some to help meet domestic demand. For the past six years (1991-1996), the volume of such imports kept on growing at significant rates. In 1991, for example, it reached only 16.177 tons worth US$ 34.7 million. As a result of increasingly high demand, it reached 27,536 tons worth US$ 53.1 million.
Taiwan the Main Supplier of Adhesive Tape
Indonesia imports adhesive tape from a number of countries, of which Taiwan has been the most important supplier. In 1995, Taiwan supplied Indonesia with 7,482 tons or 28.9% of the total volume of the latter's adhesive tape imports for the same year. The second largest supplier of adhesive tape to Indonesia is South Korea. In 1995, this country supplied Indonesia with 5,535 tons worth US$ 15.1 million. The shares of the other suppliers in the total volume of Indonesia's adhesive imports have been relatively small, i.e. less than 5,000 tons each.
Table - 1 PT Sliontec Ekadharma Indonesia's project Detail Name of company : PT Sliontec Ekadharma Indonesia Location of project : Bekasi, West Java Production capacity : -Spun rayon cloth 700 tons/annum : -Pressure sensitive adhesive 3,000 tons Investment : US$ 14 million Source of funding : -Equity US$ 7 million : -Loan US$ 7 million Shareholders : Indonesian: -PT Ekadharma Tape Industries 26% : Foreign : -Sliontec Corp., 51% : -Otoyo Shokufu Co 20% : -Orioon Trading Co 3% Fixed capital : US$ 12.9 million Working capital : US$ 1.1 million Planned commencement : July 2000 of operation Marketing plan : Domestic market: Exports: -Spun rayon cloth: 100% -Pressure sensitive 15% 85% adhesive tape
Projected export earning : US$ 5.5 million per annum
Source: Investment Coordinating Board/Data Consult
Table - 2 Indonesia's adhesive tape imports, 1991 - 1996 Year Volume Value (tons) (US$'000) 1991 16,177 34,672 1992 18,055 33,692 1993 18,839 37,836 1994 22,378 43,294 1995 25,852 51,996 1996 27,536 53,067
Source: CBS/Data Consult
Table - 3 Indonesia's 1995 adhesive tape imports, by country of origin Country of origin Volume Value (tons) (US$'000) Taiwan 7,482 12,389 South Korea 5,535 15,072 Australia 2,964 1,772 U S A 2,466 5,201 Singapore 1,299 2,845 Malaysia 1,130 1,475 United Kingdom 786 624 Others 4,190 12,618 Total 25,852 51,996
Source: CBS/Data Consult