Indon's Polysindo warns of poor '02 results on low margins

23 April 2003 02:48  [Source: ICIS news]

JAKARTA (CNI)--Indonesian purified terephthalate acid (PTA) and textile producer PT Polysindo Eka Perkasa is predicting poor margins for 2002 due to increasing raw material and energy costs.

Polysindo, which has yet to release its annual results, said in a report to the Jakarta Stock Exchange that raw material costs had increased sharply in the second half ot 2002.

For expample, paraxylene (PX) prices increased to an average of $470/tonne in H2 from an average of $398/tonne in the first half. H1 monoethylene glycol (MEG) prices increased to $515/tonne from an average of $380/tonne in the first half, while acetic acid reached $454/tonne in H2 from $410/tonne in the first six months of the year.

The report said raw material costs had increased by an average of 52% in the first quarter of 2003 compared to costs to December 2002.

Polysindo's energy costs also increased significantly last year with electricity costs increasing by 20.48% over levels in 2001, while fuel costs increased by 48.19% over the period.

The company admitted these factors had contributed to a shortage of working capital which had led to cutbacks in operating rates at its plants.

Polysindo has the capacity to produce 340 000 tonne/year of PTA, 330 400 tonne/year of polyester chips, and 187 200 tonne/year of polyester fibre. PTA operating rates fell to 62% in Q3 last year from 82% in 2001, while polyester fibre output was reduced to 42% from 45%.

The Indonesian Bank Restructuring Agency (Ibra) last week helped Polysindo's parent company Texmaco to secure a default payment of $29m (Euro26.4m) on letters of credit to the state-owned bank BNI. The Polysindo report said part of these funds would be used as working capital to increase the company's operating rates to boost sales and profitability.

Ibra is the major lender for Polysindo. Out of Polysindo's $1.39bn debt, Ibra holds $252m. But after planned restructuring, Ibra's outstanding will be reduced to $188m.

 

By: Jack Lukup
+65 6780 4359

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