Colorful Textile & Apparel Firms Operating Actively In Indonesia

Vonex Indonesia

Vonex Indonesia, an acrylic yarn spinner established in 1974, has 50,592 spindles of worsted spinning and 24,160 spindles of modified cotton spinning. The annual production capacity is 12,000 tons of worsted spinning and 3,900 tons of modified cotton spinning.

Its yarn dyeing capacity (hank) is 2,500 tons and its yarn dyeing capacity (cheese), which was newly established in 2001, is 1,000 tons. Vonex handles high bulky type or regular type acrylic yarn. In addition to pure acrylic yarn, Vonex produces acrylic/wool-blended yarn. The number of employees is 1,600. The capital for the company is US$23.66 million. Participating parties in equity capital are Mitsubishi Rayon Co., Ltd., Mitsubishi Corporation and Sojitz Corporation (formerly Nichimen Corporation).

In Indonesia, an uptrend in labor cost has become visible since 2001 with a progress in decentralization of authority. Electric power rates and oil prices also continued to rise. The situation has become tense because of the multiple, simultaneous terrorist attacks in the U.S. in 2001 and bomb terrorism on Bali Island in 2002, in addition to a strong rupiah. Consequently, textile & apparel orders from Europe and the U.S. to Indonesia declined. Against a backdrop of these situations, business results of Vonex deteriorated.

After business results worsened in 2002, there began a rising trend toward improvement in Vonex's business performances. With the implementation of the employee early retirement system in October 2003, Vonex has trimmed the number of employees from the conventional 1,850 to the present 1,600. In the acrylic fiber spinning, weaving, dyeing & finishing industry, the gap between the off-season and the busy season is substantial. Operation is busy March through August; however, action programs to deal with the off-season are critical for other periods. The overlapping of a recession in the off-season makes business management even more difficult.

As a member of the Mitsubishi Rayon Group holding the No.l position in acrylic fiber within Asia, Vonex is oriented toward marketing by taking the leadership within the industry. With both acrylic fibers, dry-spun "Finel" and wet-spun "Vonnel", Vonex is going to effectively utilize these advantages of sophistication.

It is a considerable advantage for Vonex that the parent company has various kinds of sophisticated staple. Out of the yarn produced by Vonex, 65% are sophisticated items even at the present stage; however, Vonex is going to further increase this share.

Japan-oriented business accounts for 60% of overall business, including direct and indirect shipments to the Japanese market. Of the remaining 40%, 25% is sales to local Indonesian firms and 15% is yarn exports to China, Hong Kong, Vietnam, Bangladesh and elsewhere.

With a shift in priority from quantity to quality under way, Vonex plans to pursue selling items and their volume, which meet the market needs. Vonex has strengthened cost competitiveness as a factory by effectively using equipment and by reducing fixed costs. With both processes of spinning and dyeing, Vonex will place particular emphasis on a flexible production system which can remain responsive to an adequate balance of processing volume between both processes as well as market needs.

Kanematsu Textile Corporation Jakarta Representative Office

Kanematsu Textile Corporation Jakarta Representative Office completed the present system in 2002 after the start of structural reforms which the Kanematsu Group launched in 1999. This office is headquartered in Jakarta under the direct control of the President at the head office in Japan.

Sales for 2003 were US$40 million. The line of business is: products such as polyester/cotton blended shirts and polyester/rayon pants, 40%; woven fabrics made of polyester/cotton blended yarn, polyester/ray on blended yarn and CVC, 40%; and "yarn and staple" including polyester staple, polyester/rayon blended and polyester/cotton blended yarn, 20% There are no textile products for Kanematsu to import into Indonesia. For Kanematsu, Indonesia is a Place of production and a supplying country. In Indonesia, there are factories with Kanematsu's equity participation. These factories are CENTEX producing polyester/cotton woven fabrics, Nikawa Textile producing grey goods and Flex Indonesia manufacturing shirts.

P.T. Primatexco Indonesia

P.T. Primatexco Indonesia is a spinning, weaving and bleaching firm. Of the capital of US$9,796,720, Daiwabo Co., Ltd., one of Japan's typical spinners, has a 37% equity. The largest shareholder is GKBI (Federation of Indonesian Batik Cooperatives) and it has a 51.0% stake. With 77,112 spindles of spinning frames, 336 air-jet looms and 304 shuttle looms, Primatexco is producing grey goods.

The monthly production capacity is 3,000 bales of cotton yarn and 150 bales of spun manmade fiber yarn.

Weaving is predominantly pure cotton woven fabrics and the monthly production if 4 million yards is available. 6 million yards of bleaching is also available.

Head office factory is situated in Sambong Batang 51201, Central Java. Established in July 1972, the company celebrated its 30th anniversary of founding in 2001.

As for bleaching technology, the company introduced the technology of Yamatogawa Dyeing Works, Ltd., a dyeing & finishing firm with a history of 100 years in Japan. Primatexco was a state policy company to manufacture grey for "batik", Indonesia's traditional fabrics. At that time, the company was the largest textile firm in Indonesia.

In the 1990s, Primatexco began to develop new markets overseas, particularly in Japan, as a result of the decline of the batik industry.

Presently, the export ratio is 80%. In 2000 and 2001, the company resumed equipment investment which it had suspended temporarily and began to expand one warper, one sizing machine and 102 air-jet looms in order to strengthen the equipment mainly in the weaving department.

Annual sales are 270 billion rupiah. The number of employees is 1,850. Primatexco has a stake in other textile firms. Its equity participation is: 15% for Printex, a spinning firm; 5% for Tokai Texprint, a dyeing & printing firm; and 6.9% for Dayani Garment, an apparel manufacturing firm.

Based on small item/large volume production, Primatexco plans to increase the production of high-value-added grey fabrics as well. The output of combed yarn and double-layer structured yarn has increased. As for final destinations, shipments to Japan accounted for 45% previously but this figure has fallen to 30% now. Instead of Japan, shipments to Hong Kong and Thailand have risen.

P.T. Dayani Garment Indonesia

P.T. Dayani Garment Indonesia was established at J1. Raya Narogon KM 11, Bantar Gebang Bekasi, West Java as an inspection firm for Indonesian-made apparel products to Japan for handling of sales by Daiwabo Co., Ltd., Japan. The capital is US$2.4 million and the equity participation ratio is: Daiwabo, 56.3%; GKBI, 20%; and Primatexco, 6.9%.

In 1992, the company became an apparel manufacturing firm by introducing 33 sewing machines as well as cloth spreader and cutting equipment. The company has a total of 400 sewing machines by successively introducing 133 units in 1993, 155 units in 1994 and 80 units in 1995. The monthly production capacity is 55,000 pieces of trunks and 10,000 pieces of pajamas.

The number of employees is 1,098, including 3 Japanese. The company is characterized by the manufacture of high-quality products in an integrated cotton product production system in Indonesia. Presently, this factory is called Factory No.1, but there are three other factories now.

Factory No.2 or DGI-2 was established in 1998 by introducing 31 sewing machines and other manufacturing equipment into Block A-II No 29ST Kawasan Berikat Kota Bukit Indah Purwakarta. The number of employees is 55 as of October 2003. The line of business is the manufacture of cases for down futon. The monthly production capacity is 2,000 pieces. These cases are semi-finished products before the wadding of fiberfill.

DGI-3 was established in 1999 in the same area with 56 sewing machines to cope with increasing orders for trunks bound for Europe and the U.S. The number of employees is 202 as of October 2003. The monthly production capacity is 120,000 pieces of trunks.

DGI-4 was established in 2001 in Block A-III No 15D Kawasan Berikat Kota Bukit Indah Purwakarta with 75 sewing machines for the production of dress shirts for shipment to Japan. The monthly production capacity is 50,000 pieces of dress shirts. In September 2003, FGI-4 started apparel manufacturing by importing polyester / cotton blended fabrics made of 90 two-ply yarn spun by Daiwabo, Japan. Apparel manufacturing by using Japanese-made high-quality fabrics as shown here characterizes the operation of DGI-4.

P.T. Nikawa Textile Industry

P.T. Nikawa Textile Industry has its factory in Mitra Karawang Jaya Industrial Estate Desa Parung Mulya, Kec. Ciampel Kab. Karawang 41361 Jawa Barat.

As for yarn, the company produces cotton and polyester/cotton blended yarn. As for woven fabrics, the company also produces cotton or polyester/cotton blended grey fabrics. Nikawa belongs to the Nisshinbo Group.

Nikawa is characterized by uniform and high-quality yarn and woven fabrics. In October 2002, Nikawa expanded spinning equipment from 31,680 spindles to 80,064 spindles. At he same time, the company also introduced doubling machines (doubler) of 17,910 spindles. The company's strategy has focused on the introduction of this equipment which has broadened the scope of product categories for spinning. Spinning factory No.1 produces 40s, 50s and 60s cotton combed yarn, while spinning factory No.2 produces 80s/2 cotton yarn, 34s/2 polyester/cotton blended yarn and 45s polyester/cotton blended yarn. Spinning factory No.1 employs in-house power generation, while spinning factory No.2 uses purchased electric power. The number of employees is 860 and the company has not reduced its work force despite a recession.

Nikawa, an independent entity in the Nisshinbo Group, is a firm spinning 4,000 bales of yarn monthly. Of this yarn output, Nikawatex sells 1,000 bales of yarn, while manufacturing and selling 2 million yards of grey goods by consuming the remaining 3,000 bales of yarn. Primarily, grey goods are supplied and sold to Gistex Nisshinbo, a group firm, as materials. The spirit of manufacturing at Nikawatex is: "We make yarn to make cloth." Estimated applications are: dress shirts, 60%; uniforms, 20%; and bedding, 20%. The company owns 216 air-jet looms running at 700 revolutions per minute.

PI Gistex Nisshinbo Indonesia

P.T. Gistex Nisshinbo began to look into a factory (its predecessor) in 1996, decided to set up a joint-venture firm, in 1997 and completed the establishment and registration of the new company in 1998. Dyeing & finishing operations came on stream in December 1998. After a monthly shipment of 1 million yards in October 1998, Gistex increased the shipment volume to 2 million yards in June 2000. In November 2000, the company decided to launch weaving. Weaving operations began in September 2001. The equity participation ratio for this joint-venture is: Nisshinbo, 60%; Gistex, 30%; and Teijin, 10%. The factory is located at JI. Nanjung No.66 Gimahi Selatan Bandung.

Currently, the line of business is weaving, dyeing & finishing of staple fiber fabrics. Dyeing & finishing operations are broken down into the dyeing of piece dyed fabrics as well as the finishing of yarn-dyed fabrics.

The monthly weaving capacity is 8 million yards with two warpers, one sizing machine and 86 air-jet looms.

As for dyeing & finishing, Gistex's equipment is practically the same as Nisshinbo's factory in Japan, except for liquid ammonia processing equipment. The monthly dyeing & finishing capacity is 2.5 million yards and the quality of products is as high as Japanese counterparts

Order entry, fabric management, weaving & finishing process control and even the issue of slips are all computerized. As a result, the company has achieved the same level of high quality and highly accurate delivery management as in Japan. Coal-fired boilers started operation in March 2004. The amount of investment was nearly 100 million yen. This will reduce the factory cost by 7-8%. With ample incoming orders, the challenging task in the future for Gistex Nisshinbo is how to increase the production volume.

P.T. Naigai Shirts Indonesia

RT. Naigai Shirts Indonesia is located at J1. Maligi III Lot N-3b Kawasann Industri KIIC Karawang 41361 Jawa Barat. The company was established in January 2002 and started operation in October 2002. The line of business is the manufacture of dress shirts. The capital is US$850,000. The equity participation ratio is: Naigai Shirts (Japan), 58.8%; and Nisshinbo Industries, Inc., 41.2%. The number of employees is: female, 169; and male, 7.

Three years ago, Naigai Shirts (Japan) owned four shirt-manufacturing factories within Japan. Of the four factories, the company closed three and transferred them overseas. Presently, the only factory the company owns in Japan is operating in Kagoshima, Kyushu. Of the three transferred factories, two are in China and one is this factory in Indonesia.

The factory in Indonesia keeps a 40-hour week system, working 8 hours a day and 5 days a week. The factory operates 21 days on a monthly average. For the December 2003 accounting term, the company produced 400,000 pieces of shirts and sales were US$1.25 million. For the December 2004 accounting term, the company plans to manufacture 600,000 pieces and report sales of US$1.9 million. This industrial estate is located three hours by car from Bungdong, the textile-producing district in Indonesia. Operating in Indonesia are Gistex Nisshinbo and Nikawa Textile in the Nisshinbo Group with close business relationships.

So Naigai Shirts decided to advance its factory into Indonesia by giving importance to the supply of fabrics from these firms.

P.T. Teijin Indonesia Fiber Corporation Tbk [TIFICO]

P.T. Teijin Indonesia Fiber Corporation has the following daily production capacity: 340 tons of polyester fiber and 215 tons of polyester filament. With competitiveness in both quality and price, polyester staple continues very tight production conditions at this time.

Polyester filament has lost its global competitiveness because of old equipment. The company's business has been forced to post losses in 2002 and 2003 consecutively as a result of a strong rupiah, soaring personnel expenses and climbing fuel cost. In order to deal with this situation, the company reduced work force in 2003 by inviting voluntary retirements of 320 employees. In October 2003, the company introduced coal-fired boilers.

These cost-cutting programs have produced favorable results and recently the monthly business performance has shown a trend toward black ink figures. If this situation should continue, there are highly hopeful expectations for profits on an annual basis.

In the midst of intensifying global competition, many Japanese firms have escaped to the sophistication path. Nevertheless, TIFICO will not only keep staying there. It certainly will implement the sophistication and differentiation of products. Even so, TIFICO will not approve the falling volume. In other words, TIFICO has the expansion of production in mind. Korean and Taiwanese synthetic fiber producers have begun to implement the sophistication path with equipment on a greater scale than in Japan. This will result in marketing sophisticated items at lower prices than Japanese counterparts. Therefore, the sophistication path undertaken by Japanese-made products is unable to produce successful results.

In and after October 2003, TIFICO's restructuring programs have proved to be successful, generating profits every month. If these profits should continue to stabilize in the future, TIFICO is going to newly expand equipment for polymerization, staple and yarn. The company plans to generate profits with a small amount of sophisticated products, while at the same time producing profits with a massive volume of commodity items as well.

With an investment of 300 million yen in two units of coal-fired boilers, the company improved energy cost considerably. With an additional investment of 2 billion yen, the company will introduce coal-fired power generation equipment. This will generate electric power of 30,000 KWh by burning 500 tons of coal per day. So far the company had eight units of oil -fired power generation equipment. Of these, the company will scrap two because they are old fashioned, but will keep the remaining six in order to back up coalfired power generation.

TIFICO will manufacture wet type short cut fiber for nonwovens for the first time and start marketing to U.S. firms. As for polyester staple fiber, the company has competitive equipment with the monthly output of 11,000 tons. This particular sector continues to register black ink figures even when competing with China.

Fiber for spinning applications is consumed for pure polyester yarn, polyester/cotton blended yarn and polyester/rayon blended yarn in the Indonesian domestic market. Fiber exports are for fiberfill applications. These exports have shown smooth moves to the U.S., Malaysia, New Zealand and elsewhere.

As for wet type shot-cut fiber for nonwovens which the company is going to launch this year for the first time, the remodeling work on the production line has already started at the staple fiber factory in Tangerang, Indonesia in accordance with the specification for 3d x 5mm, for example. The equipment is scheduled for completion and operation in June 2004, followed by marketing in September.

Previously, wet type short cut fiber for nonwovens had been manufactured as sophisticated items at factories in Japan and Japanese sales force carried out marketing. In this case of TIFICO, part of the trading area in this particular sector is going to be transferred from Japan to Indonesia. By operating single-handedly in Indonesia, TIFICO will be able to carry out manufacturing through marketing efficiently and independently.

P.T. Tomenbo Indonesia

P.T. Tomenbo Indonesia is located at JL Yani, Km-9, Ujungberung, Bandung. Its predecessor RT. Naintex Dua was established in 1974. With loans from Tomen Corporation, the firm purchased main machines & equipment and operated manmade fiber spinning and dyeing business. Subsequently, however, the company failed in business as an effect of post-oil shock recession and became insolvent in the payment of the amount of principal and interest for the loans from Tomen. Consequently, Tomen acquired the management rights in order to preserve and recover the remaining obligations. Tomen has been operating this business since April 1981 by transferring its personnel to Gist temporarily.

In August 1992, the company changed its company name to the present name, RT. Tomenbo Indonesia. In june 2002, Tomen acquired a 100% ownership of the company's shares with an official approval of the Indonesian Investment Coordinating Board (BKPM).

The line of business at Tomenbo is acrylic yarn spinning business by a modified cotton spinning system. The company produces 100% spun polyester yarn, polyester/rayon blended yarn and 100% spun acrylic yarn. Annual sales were US$21.26 million for fiscal 2002. The number of employees was 4 Japanese and 1,021 Indonesians as of June 2003.

Factory No.1 has 100 Toyota-built spinning frames (40,800 spindles). Factory No.2 has 11 Toyota-built spinning frames (10,560 spindles). Factory No.l has 43 Murata-built two-for-one twisters. The monthly output is 700 tons for Factory No.l and 200 tons for Factory No.2.

The company has reduced its output from 900 tons to 600 tons. This is to cope with higher electric power rates. It is really no use producing unprofitable products when electric power rates are so high. Consequently, the company changed to focus on profitable products alone. By so doing, the remaining commodity yarn was reduced to zero. At the end of 2003, the company laid off 190 employees. The company also cut overtime pay by stopping production on Sundays and holidays. With a 20% cut in the number of employees and a 10% reduction in overtime pay, the company could trim personnel expenses by 30% on the whole. In the meantime, sales fell only 10%. This means that sales have not fallen as much as the physical volume because the company has begun to sell products with higher unit prices, despite the fact that the output fell and the operating time became shorter. The breakdown of materials is: acrylics, 65-70%; spun polyester, 20-25%; and polyester/rayon blended, 5-10%. In this environment, there is a great anticipation for profits in fiscal 2004.

The presence of Tomenbo is meaningful because it means Tomen Corporation, a trading firm, has a production base. What is more important is that this base is a factory to be able to produce high-quality and widely diversified products. This meaning will become increasingly intensified when consideration is given to the global marketing strategies of trading firms.

Tomen Corporation Indonesia

Textile & apparel sales at Tomen Corporation Indonesia for the December 2003 accounting term were US$120 million (including non-principal business). The company has three Japanese staff members responsible for textile business. Once the company handled textile machinery, steel, non-ferrous metals and coal, but all these commercial rights were transferred to Toyota Tsusho, which integrated these businesses. Tomen handles various kinds of raw textile products such as raw cotton, yarn and woven fabrics.

P.T. Indonesia Asahi Kasei (INDACI)

P.T. Indonesia Asahi Kasei (INDACI) is an acrylic yarnspinning factory with equipment for yarn dyeing. It also has a nylon factory. Acrylic yarn is marketed to Australia, New Zealand, Thailand and Korea, while nylon yarn to Taiwan, Japan and the U.S.

The company reported losses last year. To cope with this situation, the company has begun to make costcutting efforts this year. In January this year, the company announced a voluntary retirement system and planed to reduce personnel at its acrylic factory from 1,000 last year to 750 by June this year. (Interviewed in April) Projected sales for 2004 are 4.7-4.8 billion yen and the company plans to post profits, except for extraordinary losses. As for the nylon factory the production capacity of monofilament yarn rose to 50 tons as a result of the transfer one water-cooled type nylon monofilament manufacturing equipment from its Nobeoka factory in Japan.

P.T. Unilon Textile Industries (UTI)

P.T. Unilon Textile Industries (UTI) has the capital of US$10.5 million (3.4 billion rupiah). The equity participation ratio is: Toyobo Co., Ltd., 32.505%; Prominent Apparel (Hong Kong), 32.505%; Sari Hasta, 30%; and Mult Investama, 4.99%. The company was established and registered in January 1970. With 150 looms, the company started operations in 1971. From 1972 to 1973, the secondphase and third-phase construction took place to add spinning equipment and looms.

In 1974, the company installed a complete set of dyeing equipment. In 1990, a spinning factory with 5,184 spindles was built. From 1994 to 1996, plant expansions continued in each department, while the company gave a strong push to a shift to wide-width fabrics. In 1997, the company started to implement both the purchase of electric power and self-generation. In 2002, the company introduced two units of computerized yarn manufacturing equipment.

After all these changes, the current equipment is: 81 spinning frames (34,992 spindles), 313 air-jet looms, 4 rapier looms and 153 shuttle looms with dobby machines. The number of looms totals 470 units.

The monthly spinning capacity is 1,600 bales, while the monthly weaving capacity is 2.45 million yards. Dyeing capacity is 2.4 million yards, of which 800,000 yards are wide-width.

Unilon's factory started operation with the equipment for polyester cotton fabrics, generating profits at the outset by domestic selling in the Indonesian domestic market. After the Plaza Accord in 1985, however, the company shifted its priority to exports. Presently, the whole output is for exports. Export destinations are: the U.S., 30%; the EU, 25%; Japan, 15%; the balance of 15% goes to Australia, Bangladesh and other countries in Asia.

In the case of polyester / cotton blended woven fabrics, it is difficult to satisfy price requirements and the business is unprofitable. This is why the company has become pure cotton fabric-oriented. Presently, the mainstay item is yarn dyed fabrics. Furthermore, in the case of polyester woven fabrics, the company has achieved sophistication by adopting polyester staple with functional properties. The company also uses polyester staple from recycled PET (polyethylene terephthalate) bottles. By spinning highly shrinkable polyester staple with its good feel and warmthretaining property for jersey applications, the company has gained highly favorable evaluations.

Sales for the December 2003 accounting term were US$25 million, but the company posted losses. For this reason, the company has endeavored to reduce energy and labor costs this year. In April, the company started operating coal-fired boilers and cut steam generating cost to one-third, as compared with the past. Of three oil -fired boilers, the company will scrap two, but will keep one for backup purposes.

A year ago, the company started the production of fabrics for "VP-finish", a sophisticated finish for Toyobo's shirting. With the introduction of "VP finish" testing equipment in April this year, various kinds of testing have been made available. These arrangements have made it possible to make delivery quickly.

P.T. Itochu Indonesia

PT. Itochu Indonesia, a trading firm established in 1990, is granted with an export/import license to trade in diversified products such as chemicals, foods, paper, pulp and lumber. In Indonesia, there are 38 ltochu's associated firms in which ltochu has equity participation, of which six firms are involved in textiles & apparel.

As for textiles & apparel, ltochu handles all forms of textiles & apparel from staple, yarn, fabrics to industrial materials and apparel products. The textile & apparel division has 5 Japanese and 31 local staff members. ltochu Indonesia's basic strategy is to merchandize and market high-grade products rather than Chinese-made products which display the advantages of Indonesia without competing with China.

With synthetic fiber producers and cotton spinners with Japanese capital, Indonesia has the base that makes it possible to produce high-value-added products from materials to fabrics and apparel products. A spokesperson of the company explains that Indonesia has superiority over China in manmade fiber yarn, manmade fiber staple and weaving technology, among other things.

PI Mermaid Textile lndustri Indonesia (Mertex)

P.T. Mermaid Textile lndustri Indonesia (Mertex) has its factory at Desa Lenkong, Kecamatan Mojoanyar, Kab. Mojokerto, Jawa Timur. Established in 1972, the company started operation in 1972. The capital is US$16.36 million (6,789.4 million rupiah). The equity participation ratio is: Shikibo Co., Ltd., 72.8%; Nomura Trading Holdings, 22.98%; and the Indonesian party, 4.22%. When including group firms, Mertex will have integrated manufacturing equipment from spinning to apparel manufacturing. However, its main business is the marketing of textiles. The export ratio is 75%.

The spinning equipment is 50,784 spindles. The company owns 180 air-jet looms, 20 rapier looms and 104 shuttle looms, a total of 304 looms. As for dyeing & finishing equipment, the company has one line for preparatory dyeing, two lines for dyeing and two lines of resin processing. The company also has one calendar-finishing machine.

Mertex owns looms in 160cm and 190cm widths. Originally, Mertex was a factory manufacturing narrow-width shirting. While competing with China, however, Mertex began an orientation toward wide-width. Previously, the continuous dyeing equipment was 1,650 mm in width, but now 1,800mm width is available. The current actual production volume against the capacity is 1.8 million yards of woven fabrics and 1.5 million yards of dyeing & finishing. Sophistication in quality is partly responsible for a fall in production volume.

Sales of the Mertex Group for the December 2003 accounting term were US$2.5 million, and registering lower sales than the preceding year. Ordinary losses have continued for two years consecutively. In 2003, it was difficult to satisfy price requirements because of soaring cotton prices. 186-thread and 208-thread polyester/ cotton blended fabrics account for 20% of overall woven fabrics produced by Mertex. These products once generated profits, but it has been difficult in recent year.

Consequently, the company is aggressively working on fabrics for work uniforms and new products such as 80s / 2 pure cotton fabrics.

This factory can produce ring double yarn (ciro-spun cotton yarn) and double-layer structured yarn.

P.T. Kurabo Manunggal Textile Industries (Kumatex)

P.T. Kurabo Manunggal Textile Industries (Kumatex) was established in 1974 and started operation in 1976. The factory is located at Jl. M.H. Thamrin l, Tangerang, Jawa Barat. The capital is US$16 million (6,640 million rupiah). The equity participation ratio is: Kurabo Industries Ltd., 42.86%; Marubeni Corporation, 17.14%; and Dharma Manunggal, 40%.

Its equipment includes 121 spinning frames (52,448 spindles), 53 twisters (6,360 spindles), 10 circular knitting machines and 56 air-jet looms. The monthly output for fiscal 2002 is: yarn, 32,000 bales; knit, 185 tons; and woven fabrics, 4.89 million yards. The export ratio in fiscal 2002 is 71.2%.

Sales for the December 2003 accounting term remained practically unchanged, compared with the preceding year. The company posted ordinary losses because of soaring cotton prices. For this reason, the company is going to reduce the ratio of commodity products from 40% to 30%, The company is going to pursue a policy of manufacturing optimum products offered only by Indonesia, instead of products which are available everywhere.

The company has received recognition and favorable reception for its selling points shown by special acrylic yarn for sweaters to produce softness and a crisp feel as well as bulky acrylic yarn to give a comfortable feel to socks. In addition to bulky acrylic, diversified materials used by the company include anti pilling polyester, regenerated polyester fiber, Supima cotton and Egyptian cotton. The company produces sophisticated yarns such as ring double yarn (ciro-spun cotton yarn) and double-layer structured yarn by using these materials and various types of equipment.

Polyfin Canggih

Export - Oriented Polyester Filament Producer in Bandung

PT. Polyfin Canggih is a leading polyester filament producer launching its operation in Bandung, a filament textile-manufacturing center in Indonesia. It is worthy of note that Polyfin started its business as an export-oriented fiber producer from the beginning of its establishment in November 1994. The company has the largest capacity in Indonesia for a single plant of its type and as one of the largest DTY producers in Indonesia.

Polyfin started its operation with 180 tons/day capacity : 72 tons for DTY, 30 tons for SDY and 78 tons for chips. As the daily production capacity of DTY increased to 180 tons in 1999, Polyfin's daily production capacity of polyester filament yarn & chips amounts to 232.5 tons.

In year 2003, about 53% of production was exported to overseas countries thanks to its good reputation on quality. By market, Europe including Spain, and Italy is the largest market for the company, followed by China (including Hong Kong), Vietnam, Turkey, the United Kingdom, and other parts of the world. About 47% of production is shipped to the domestic market. Polyfin has been carrying out marketing in Europe including Poland, through two sole agents. One agent in the United Kingdom covers U. K territory including Ireland, and the other agent in Italy covers the remaining European region (except U.K) and has structured sales networks by cooperating with agents in major European countries.

Polyfin acquired ISO 9001 and ISO 14001 certificates in 2001. The company also acquired OHSAS (Occupational Health and Safety Management System) and the Primaniyarta Award by Indonesian government, which certifies contributions to the nation by achieving a large amount of exports. This award has been given to Polyfin in two successive years, 2001 & 2002.

Toray Group in Indonesia

P.T. Toray Industries Indonesia (TIN)

P.T. Toray Industries Indonesia (TIN) is a regional headquarters of the Toray Group in Indonesia. Established in October 2002, the company has the capital of US$200,000. According to the company, operating profits for fiscal 2003 at five major firms in the Toray Group doubled from the preceding year. Profit improvement programs with particular emphasis on cost cutting have proved to be successful. Priority programs for this year include the continuation of business operations with consideration given to safety, disaster prevention and the environment as well as completely accident-free operation, the reduction of total cost and a shift to a new value creator.

P.T. Indonesia Toray Synthetics [ITS]

P.T. Indonesia Toray Synthetics (ITS) was established in 1971 with the capital of 20.714 billion rupiah. The equity participation ratio is: Toray Industries Inc., 65.5%; Mitsui & Co., Ltd., 19.9%; and P.T. Easterntex, 14.6%. The production capacity is: nylon filament, 320 tons; polyester filament, 1,300 tons; and polyester staple, 5,550 tons. ITS, the only nylon yarn producer in Indonesia with an integrated operation of polymerization and spinning, has a share of 43% in Indonesia for apparel and industrial applications combined. So far innerwear to Europe and the EU. was an important application in marketing. Innerwear is made of both nylon and spandex. Nylon filament generated considerable profits until 2002; however, incoming orders have continued to fall since 9.11 terrorism. Furthermore, the quality of Chinese-made products has improved and incoming orders declined considerably in this particular sector.

The company is supplying nylon yarn suitable for sportswear and casual wear to Toray Sakai Dyeing and Weaving (TSD), a Toray Group firm in China, since 2003.

P.T. Century Textile Industry TBK [CENTEX)

P.T. Century Textile Industry TBK (CENTEX) was established in 1970 and started operation in 1972. CENTEX is a poly ester/cotton blended yarn weaving, dyeing and finishing firm. The equipment capacity is: spinning, 730,000 lb.; weaving, 8.8 million yards; and dyeing, 4 million yards. The capital is 10 billion rupiah. The equity participation ratio is: Toray Industries Inc., 27.9%; Kanematsu Textile, 23.0%; and Tokai Senko KK, 3.3%.

CENTEX positions itself as "a firm producing special items among polyester/cotton blended woven fabrics." The weaving equipment is entirely 44/45 inch in width. 30% of the weaving equipment has the dobby attachment. The company aims to reduce the factory cost of energy by 15%. The breakdown of energy cost is: electric power, 80%; and natural gas, 20%. In February 2003, the company introduced natural gas for boilers. As for power generation, the company started to examine whether the company should use coal or natural gas. After registering all-time high profits in 1997, the business results of CENTEX have subsequently declined. The company posted operating losses in the first half of 2003. For the October 2003-March 2004 period, the company achieved black ink figures on operating profit basis. Destinations of final products for shirting are: Europe and the U.S., 70%; Japan, 20%; and the Indonesian domestic market, 10%.

P.T. Easterntex [ETX]

P.T. Easterntex (ETX) is a spinning and weaving factory for poly ester/cotton blended yarn and fabrics.

The capital is US$12.6 million. The equity participation ratio is: Toray, 69.8%; and the Indonesian party, 30.2%. With an investment of 160 billion rupiah, the new factory (SB Factory) came on stream in November 2000. This was intended to offset part of yarn spinning capacity of Pentex in Malaysia which was destroyed by fire in June 1997.

The current equipment is 152 spinning frames (65,040 spindles) at SA Factory and 34 spinning frames (34,272 spindles) at SB Factory, a total of 186 spinning frames (99,312 spindles). The company owns 60 shuttle looms, 358 44/45 inch wide air-jet looms and 248 58/60inch wide air-jet looms. From the above, the current production capacity is: spinning, 2.15 million lb.; and weaving, 6.63 million yards. The number of employees was reduced from 1,000 in 2002 to 889 in 2003 and 840 in 2004.

The analysis of energy demand at ETX reveals that the ratio of oil -fired in-house power generation and purchased electric power is fifty-fifty. Presently, the company has started to examine whether the company should adopt a shift from in-house generation to natural gas

The plan to change equipment for the April-September 2004 period calls for an addition of spring frames (1,008 spindles). In the meantime, the company will change to a 688 air-jet loom operating system in and after October by suspending the operation of shuttle looms entirely.

P.T. Indonesia Synthetics Textile Mills[ISTEM]

P.T. Indonesia Synthetics Textile Mills (ISTEM) was established in 1970 and started operation in 1972. ISTEM is a spinning, weaving and dyeing & finishing factory for polyester/ray on blended yarn and fabrics. The company's weaving department has 200 air-jet looms.

The monthly equipment capacity is: spinning, 1.18 million lb.; weaving, 2.12 million meters; and dyeing, 1.85 million meters. The capital is US$10.3 million. The equity participation ratio is: Toray Industries Inc., 50.1%; Mitsui & Co., Ltd., 25.1%; and the Indonesian party, 24.8%. The company suffered losses in 2001 and 2002, but rebounded to ordinary profits in 2003. The multiplier effect of costcutting and a rise in unit prices was beneficial.

ISTEM's main market is the Middle East, which accounts for 70%. Other destinations of exports are: Europe, 15%; and the Indonesian domestic market, 15%. There is no shipment to Japan.

P.T. Acryl Textile Mills [ACTEM]

P.T. Acryl Textile Mills (ACTEM) was established and started operation in 1975. ACTEM is an acrylic yarn spinning and dyeing firm. The monthly equipment capacity is: spinning, 390 tons; and dyeing, 280 tons. The capital is US$2.3 million. The equity participation ratio is: Toray Industries Inc., 50.3%; Mitsui & Co., Ltd., 19.7%; and the Indonesian party, 30%. The number of employees is 404 as of February 2003.

Losses continued in 2001 and 2002 consecutively. Despite the implementation of action programs to deal with losses, small losses were left in 2003. Acrylic fiber spinning business has seasonal factors and it is difficult to work out effective action programs to offset this situation.

DyStar Colours Indonesia:

The Leading supply bases

P.T. Dystar Colours Indonesia, a subsidiary of DyStar Textilefarben GmbH & Co. Deutschland KG., Germany, is manufacturing international standard textile dyes as a base for DyStar's global networks and takes care of the local marketing for the Indonesian textile market. They are going to intensify their business by reinforcing their concentration on innovative products.

Main local promotion efforts are for new innovative product ranges like "Ramazol R-GB" and "Levafix CA" for cellulosic dyeing, "Dianix PLUS Series" and "Optidye Programme" for polyester, "Indigo Solution" for blue denim dyeing and now also locally produced "Imperon Pigments" for pigment printing. "Indigo Solution" can contribute to substantial cost saving in the dyeing process.

DyStar Colours Indonesia owns factories in Gabus and Cilegon, West Java. The Gabus Factory is producing disperse dyes. Its annual production capacity is 10,000 tons. They are going to expand its production capacity by 2,500 tons to 12,500tons at the end of 2004.

The Cilegon Factory is producing reactive dyes with an annual production capacity of 6,000 tons. 85% of dyes produced by DyStar Colours Indonesia are for export and the remaining 15% for the Indonesian local market. The head office in Germany is organizing worldwide distribution.

Being the largest DyStar disperse dye factory and the second largest DyStar factory for reactive dyes after its head office factory, DyStar Colours Indonesia is one of the leading supply bases for DyStar. Its main shipment destinations are diversified and include not only Asia, but also big markets like the U.S., Japan, Italy, France, Germany and Turkey and the rest of the world. DyStar Colours Indonesia exports also very special products to Japanese customers requesting very high quality products.

P.T. Tokai Texprint Indonesia

P.T. Tokai Texprint Indonesia was established in 1991 as a printing & dyeing firm. The monthly production capacity is 3 million yards. Actual production in January-June 2004 shows the monthly output of 3.3-2.4 million yards.

Of its production, half is for its converting business where the company itself handles sales from grey fabrics, while the remaining half is for commission processing. The company has placed special emphasis on the U.S. market because of the decline in exports to Japan. The number of employees was 460 as of December 2003. However, manpower reduction programs through natural decreases are under way and the company will trim this figure to 400 in December 2004. The company will also reduce 13 Japanese in March 2004 to 10 in December 2004.

The company is capable of processing difficult items for dyeing such as fancy fabrics and linen blended fabrics. As for its converting business, the company's policy is to seek everywhere throughout the world's apparel manufacturing bases for marketing. In addition to Indonesia, the scope of marketing has been expanded to include Sri Lanka, South Africa, Dubai, Manila and China.

Tokai Texprint is positioned as a printer to play its role in an integrated system operated by equity participating firms (Daiwabo Group and GKBI). In the meantime, as a member of the Tokai Senko KK Group, the company is ready to offer high-quality fabrics at reasonable prices by combining arrangements of cheap fabrics with high-grade dyeing technology as a textile converter through the utilization of its own global network. Under the leadership of a Japanese manager, the company is capable of manufacturing and marketing fabrics which customers find reliable.

P.T. South Pacific Viscose

Fulfilling the Demand for High Quality Fiber

Located in Purwakarta, West Java, PT South Pacific Viscose is a member of the Lenzing Group and it has been serving the Indonesian and Asian Textile Industry for 22 years. The company's strategic aim is to fulfill the demand for high quality viscose fiber for the Textile and Non Woven Industries in Indonesia and the Asian/Pacific region now and in the future.

Stringent quality requirements are achieved by joint cooperation with the research & development team as well as using Lenzing fiber technology. Therefore many steps are taken to improve quality and quantity according to demand and to produce a viscose fiber which meets the high standard of Lenzing Fibers - world leader in cellulose fiber technology.

Gerhard Danninger, Sales and Marketing Director, points to the successful development of SPV. SPV has been steadily growing over the last 22 years and is still continuing its improvement. The first line for Viscose production was opened in 1982 with an annual capacity of 30.000 to. Over the years numerous extensions and modifications have taken place to reach a current annual capacity of 140.000 to. Significant milestones have been the opening of Line 3 in 1996 and due to the high quality standard, SPV has also been able to serve the market with a Non Woven Fiber since 1998.

SPV is currently producing various fiber types for the textile and non woven industry ranging from a fiber count of 1.2 to 2.0 den, cut length 32 to 51 mm and luster bright, semidull and dull. From this year's production SPV will produce around 15% of fiber for non-woven applications; this will be of particular importance for the future development of other Asian markets like China, Taiwan, Korea and Japan.

"SPV is market leader in the Indonesian market. Nevertheless, an important share of our production is exported. SPV is also reinforcing its position by offering Lenzing Modal� and Lenzing Lyocell� to Indonesia. Our technical marketing by Peter Krueger as well as merchandising by Ida Purnama will therefore be important elements in the introduction of these top functional fibers " said Mr. Gerhard Danninger who is sales director for Lenzing Fibers in Asia and as an SPV board member is also responsible for sales in SPV.

"The demand for viscose fiber has dramatically increased since the third quarter of last year and we see SPV very well booked till the third quarter 2004.

The future success of SPV as a viscose fiber supplier depends on its ability to produce high quality fiber, to focus on "specialty products" like non-woven fiber and to be aware of developments in the industry.

"We are conscious of changes in demand and application from our customer's side and of the importance of new and innovative products to fulfill the requirements of the industry. In this respect we make full use of the research and development resources of the LENZING Group to support and meet our customers demands", says Peter Krueger.

[Sidebar]

P.T. Toyota Tsusho Indonesia

P.T. Toyota Tsusho Indonesia primarily handles textile machinery and sales for the March 2004 accounting term were US$15 million. One Japanese and two local staff members do business operation. The company will market spinning equipment and looms to textile factories, which are operating in Indonesia.