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  Latest News  
  August 30,  2004
Volume 82, Number 35
p. 6
 

BUSINESS IN ASIA

  Chinese Competition Forces Closing Of Indonesian Fiber Plant  

JEAN FRANÇOIS TREMBLAY
   
 
 

Asahi Kasei will cease operations at its Indonesian subsidiary that manufactures acrylic yarn and nylon filament, laying off nearly 1,200 employees. The entire business will be liquidated in December.

Asahi says that the subsidiary, known as Indaci, has been struggling since Indonesia’s 1997 currency crisis and that there are no prospects of improvement. For the past few years, Asahi has been cutting costs by retiring workers and investing in equipment such as a coal-fired boiler to reduce the cost of steam generation. But this has not been enough to keep pace with the deterioration of business conditions in Indonesia.

Indonesian clothing manufacturers that are the customers of Asahi’s products are increasingly uncompetitive compared with China. The pressure will worsen next year when the U.S. and Europe abandon the quota system for clothing imports that has virtually guaranteed Indonesia a market in wealthy countries.

Indaci has been operating plants in Jatiluhur, about 70 miles southeast of Jakarta, since 1974. An Asahi spokesman says the subsidiary’s equipment was last upgraded in the 1990s when Indaci raised its nylon production capacity. Indaci can produce up to 7,800 metric tons per year of acrylic and 6,600 metric tons of nylon fiber, both targeting the high end of the market.

Asahi Kasei has been striving to boost its profits since reporting a net loss of $575 million in 2002. The company underwent a dramatic internal reorganization last year. The Japanese firm produces neither nylon nor acrylic in China.

 
     
  Chemical & Engineering News
ISSN 0009-2347
Copyright © 2004
 


 
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