INDONESIA - Rising demand drives viscose plants expansion
Monday, 18. February 2008
Rising demand for viscose rayon staple fibre in Indonesia is driving local fibre manufacturers to increase production capacity. Indo Bharat Rayon (IBR) of India's Aditya Birla group and South Pacific Viscose (SPV), which belongs to the Austria-based Lenzing> group, are the only producers of viscose rayon staple fibre in Indonesia. Both have reportedly been operating at full capacity for the past several years, turning out an estimaed 326,875 tons of fibre in 2006 and selling the lion's share of it to local textile manufacturers.
As reported by Textile Asia in June, the government had claimed that local textile industry consumed over 545,470 tons of viscose rayon staple fibre, when local production was far less than that and viscose rayon fibre supply globally remained tight. The government has lately revised its claim down to between 230,000 tons and 250,000 tons.
According to IBR's managing director Prakash Maheshwari, 80% of IBR's production goes to feed 55% of the local market. Based on that claim, IBR supplies as much as 137,500 tons of rayon fibre to the local market out of its annual production of 171,875 tons. Mr Maheshwari also says that SPV supplies 41% of the local market while 4% comes from China and Thailand.
SPV, meanwhile, has increased its production capacity from 150,000 tons in 2006 to 155,000 tons in 2007. About 60-70% of SPV's production or as much as 102,500 tons goes to the local textile industry while an estimated 10,000 tons come from Thailand and China.
The total of some 250,000 tons of viscose rayon fibre thus available to the local textile industry is said to be inadequate to meet the textile manufactures' demand.
Demand for viscose rayon fibre is rising not only in Indonesia, but also across the world. Global demand is forecast to rise at about 5-8% annually. In Indonesia, at the same time, the clothing industry has found a bright future since the ending of the Multi Fiber Agreement in January 2005, and that is fuelling new demand for viscose rayon fibre, says SPV's director od sales and marketing, Gerhard Danninger.
Recognising this rising demand and its growth potential, the Lenzing group, which is a world leader in cellulose fibre manufacturing, has decided to invest 106 million euro to expand the production capacity of SPV with a fourth production line at its plant in Purwakarta, West Java. This expansion will increase SPV's fibre output by an additional 65,000 tons a year, thus raising its annual production from the present 155,000 tons to 220,000 tons.
IBR, on the other hand, is in the process of completing a US$50 million sixth production line. When this new line line goes into service in April 2008, IBR would rank as the largest single location producer of rayon staple fibre
IBR, says Dr. Danninger, "invested quicker than us; but we are going to invest to meet the huge need of the local market which is really good news for our customers." When both producers have completed their expansion program, total viscose rayon production capacity in Indonesia will rise to 400,000 tons a year.
The 80% of its output which IBR sells to local customers goes mainly to such companies as Apac Inti Corpora, Himalaya Texindo, and Sritex. The remaining20%, says Mr Maheshwari, is exported to customers in the EU, the US as well as the middle East and the Far East. SPV similarly exports some 30% of its production to Japan, Taiwan, South Korea, Pakistan, China, India, Turkey, US, Middle East, Iran, and Pakistan.
As much as 70% of the funding allocated for the expansion of SPV will go to building its new production line, according to the chairman of enzing's management board, Thomas Fahnemann. The remainder will be used for infrastructure expansion and optimisation of existing facilities. The project will also make an important contribution to internal raw material supply at high environmental standards.
SPV is also reported to have completed the installation of a watewater and a waste-gas treatment plant. "We are very concerned about the environmental-friendly company and always invite environment ministry to come and see our wastetreatment," says Dr. Danninger.
Lenzing operates six cellulose fibre plants worlwide and the seventh - in India - is in the planning stage. With these facilities as well as the new production line being planned in Indonesia, together with the planned expansion project at the Tencel production site in Heiligenkreuz, Austria, which was approved earlier in 2007, plus the increased capacity at the plant in Lenzing, will push up the nominal capacity of the Lenzing group from the present 560,000 tons of cellulose fibers to 660,000 tons per year.
According to Mr Maheshwari, Aditya Birla group that owns IBR is the largest textile enterprise in India. Besides IBR, the group also has production bases in Thailand and China. Its global market share is said to be 23%. IBR is placing emphasis on producing high quality fibre for value added applications viz textile fibre for high technology spinning (Open End, Vortex etc) and non-woven fibre for specialty hygiene and medical usage which are supplied to leading nonwoven manufacturers around the world.
SPV will increase its fiber production capacity by 80,000 tons per year with the construction of line 5, which will operate by end of 2012. This addition capacity will increase SPV’s total production to 325,000 tons per year.
Further investment by the Lenzing Group to expand fiber production capacity at its Indonesian subsidiary PT. South Pacific Viscose
Due to the strong demand from the Indonesian textile industry for high-quality viscose fibers, the Lenzing Group, a world market leader in man-made cellulose fibers with its registered office in Austria, announced the immediate further expansion of its production capacity at PT. South Pacific Viscose (SPV), the company's main Asian production facility, located at Purwakarta, West Java.