DSM Kaltim Melamine extends plant shutdown

04 September 2008 04:51  [Source: ICIS news]

SINGAPORE (ICIS news)--DSM Kaltim Melamine (DKM) will keep its 60,000 tonne/year melamine plant in Indonesia closed until end-September, citing recent developments in raw material prices, the company said on Wednesday.

 

DKM said the scheduled maintenance of the plant is on track for completion in the second week of September but the restart date will be pushed back to the end of the month.

 

“It was due to increased urea cost. It did not make sense to produce melamine at current urea costs,” said a source close to the company. The expensive urea, which is used as feedstock in melamine production, is squeezing DKM’s margins, he said.

 

DKM, meanwhile, said its decision to extend the plant shutdown will have no adverse impact on the agreed supply of melamine.

 

The company has enough stocks to deliver on its agreed third quarter contracts, the source said. The plant located at Bontang, East Kalimantan will re-open depending on how urea market prices behave, he added.

 

This is the second time that DKM has decided to extend its shutdown of the Kalimantan plant, keeping it offline since early August.

 

DKM is a joint venture between Dutch chemicals and life sciences group DSM, Indonesian state-owned fertiliser firm PT Pupuk Kalimantan Timur and PT Barito Pacific Lumber Company

 

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By: Leon Toh
+65 6780 4359

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