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1. EKADHARMA COOPERATES WITH JAPANESE INVESTORS IN ESTABLISHING SPUN RAYON CLOTH AND ADHESIVE TAPE PLANTS.

PT Ekadharma Tape Industries, which deal in the adhesive tape industry, has established cooperation with three Japanese investors --Sliontec Corporation, Otoyo Shokufu Co. Ltd., and Orion Trading Co. Ltd.-- in setting up a spun rayon cloth plant with an annual production capacity of 700 tons and a pressure sensitive adhesive tape plant with an annual production capacity of 3,000 tons. These plants --which together will require an investment commitment of US$ 14 million-- will be managed by PT Sliontec Ekadharma Indonesia. They will be built on a 22,000 square meter plot of land in West Java's Bekasi Industrial Estate.

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
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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Publication:Indonesian Commercial Newsletter
Date:Jul 28, 1997
Words:861
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