Kohap studies polyester back-integration

06 March 2000 00:00  [Source: ACN]

Kohap Ltd is studying plans to back-integrate from filament yarn to polyester polymerisation production in Indonesia. Its subsidiary Kohap Indonesia is looking at a 300 tonne/day (99 000 tonne/year) polyester polymerisation project and a decision will be made before year-end.

Kohap Indonesia has an 89 tonne/day filament yarn plant in Karawang, the capacity of which needs to be increased to improve its economics. This can only be achieved through back-integration in Indonesia. At present, feedstocks are sourced from Kohap in South Korea.

In South Korea, Kohap has put on hold its plans for a 100 000 tonne/year polyester polymerisation project because of the depressed market (ACN 21 Feb, p42).

The chaebol was initially hoping to use the feedstock to produce film resins, but this project was scrapped due to poor business. Kohap is still keen on the polyester polymerisation project, but has to decide on the derivative product.

Kohap produces a total of 590 tonne/day of solid state polyester polymer in Ulsan, South Korea. In China, it has a 300 tonne/ day polyester polymerisation plant in Qingdao, but there are no plans to expand it.

Industry observers said that there may be another round of polymerisation expansions.

But some producers said expansion plans are still not concrete, although some suspended expansions may resume (ACN 21 Feb, p42).

The small domestic market in South Korea has already forced producers such as Saehang to shelve their expansions.

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