INDONESIA: Tifico Fiber Indonesia nearly triples capital expenditure for 2013

Sugito Budiono, administration director of Tifico, said that the capex, which is a major increase from last year's $2.2 million, would mostly be allocated for production and new machines. Around $1 million will be used for company infrastructure.

"We have bigger capex this year because we need to revamp our machines,” he said.

Sugito said that while the capex increase was large, it would not have a significant effect on the company's production capacity.

He said that 2013 is a challenging year for the company to achieve better performance, amid predictions of higher production costs, raw materials, energy sources and workers' salaries.

"It is hard to increase our income this year. [We assume] it would be the same as last year. There is even a chance that our profit declines due to the increasing production costs and imported dumping of goods that influence the selling price,” he said.

Tifico, which was established in 1973, produces polyester chips, staple fiber and filament yarn. The company mostly sells its products in the domestic market, while the remaining 20 percent are exported. The company's market share in Indonesia is 20 percent.

In 2012, Tifico recorded production of 201,000 tons of polyester chips, 133,000 tons of polyester staple fiber and 65,000 tons of polyester filament yarn.

"Even though most of our products are locally marketed, we still have opportunities to increase the market share in the global market in the future,” Sugito said.

Source: Daily "The Jakarta Globe", Jakarta; 4 June 2013(Syed Rashid Ali, Karachi, Pakistan)