South Pacific Viscose - Orders Show Quantitative Recovery
Wednesday, 01. April 2009
PT. South Pacific Viscose reports that its order books are full, and its plant is producing viscose fiber at full capacity.
But even for SPV, the situation was different a few months ago. The financial crisis affected its business last year with the worst coming in November and December. On an annual basis, however, business was not so bad; the first quarter was very good, not so good in the second quarter, better again in September and October, and then extremely poor in December.
2009 also started in an extremely difficult situation. Volumes and prices were low, and costs were also reduced. Dr. Gerhard Danninger, Director, Sales & Marketing at SPV, says, "It was an extremely difficult period for viscose producers all over the world, and for all spinners as well, as they also suffered considerably."
However, reports began to come in thereafter from China that business on the Mainland was in very favorable condition, and even after the Chinese New Year, the market would continue to be vigorous.
SPV is currently producing on three lines at full capacity, and a fourth line is to start operation from the beginning of 2010. This new line will significantly increase its capacity to more than 200,000 tons.
According to Dr. Danninger, the Indonesian domestic market has not been so bad in terms of volume. In the second quarter of 2008, hte Indonesian market was in an extremely poor condition, while exports were still favorable. But in December, January and even in February this year, the order volumes have been very good; of course, price still remained extremely low. Business would first have to recover to normal volumes before prices can be negotiated, but SPV considers Indonesia is really on the right way back towards high volumes.
Pulp is perhaps the greatest problem at the moment for the company. Customers are said to be coming back to renegotiate prices, and so SPV is also going to pulp suppliers to discuss pulp prices again. The negotiations are difficult, but at least pulp suppliers are showing some understanding.
As fot business in 2009, Dr. Danninger is very optimistic with favorable business in China and full order books. Prices would have to be increased significantly, but sharp price increases would hinder the current positive developments again, and the company prefers to keep the very favorable forecast it has seen up to now.
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.