Leading Viscose Fiber from Indonesia

Wednesday, 01. April 2009

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.