Nylon yarn makers expand capacity on robust demand

Mustaqim Adamrah, The Jakarta Post, Jakarta | Fri, 11/07/2008 10:53 AM  

Two nylon yarn producers, PT Indachi Prima and PT Matahari Sentosa, are increasing their production capacities, citing the prospect of robust demand on government spending. 

Head of the Indonesian Textile Association's (API) West Java chapter, Ade Sudrajat, said the companies planned to spend a total of Rp 50 billion (US$4.58 million) on their expansion projects. 

"(Indachi) will spend Rp 30 billion and (Matahari) Rp 20 billion to increase their capacities by an average of 20 percent," he said Thursday. 

He, however, was unable to provide the figures of the two companies' current capacities. 

Indachi, situated in Karawang, West Java, is controlled by a Japanese firm, while Matahari is a local firm, situated in Cimahi, Bandung, the province's capital. 

He said Indachi's project was already underway and slated for completion by the end of this year, while Matahari would start its project early next year. 

Continued high demand for nylon yarn products, he said, triggered the expansion. 

Ade said global financial turmoil had not affected demand for nylon yarn products much. 

"Demand is relatively high for nylon yarn as government spending remains stable and the global turmoil only affects the market of daily apparel," he said. 

The nylon yarn produced by the two companies is commonly used to make swimsuits and army uniforms, as well as waterproof materials, like tents and rain coats. 

The two companies export their products to Middle Eastern and European Union countries, he added. 

While the outlook for the global nylon yarn market remains positive, API has forecast some 120,000 temporary layoffs next year due to a slowdown in the U.S. economy. The United States is the main buyer of Indonesian textile products.