logo
CEO Message
CEO Message

Dear Valued Shareholder,

In 2015, the global economy was still not encouraging, so the industry in Indonesia still relied on domestic consumption, especially household consumption to sustain economic growth, despite a slight decline as a result of the depreciation of the rupiah against the US dollar which impacted the increase in prices of essential goods.

In 2015 Indonesia`s economic growth was lower compared with the previous year amounted to only 4.8% which is also accompanied by the rupiah that continued to depreciate. The weakening of the rupiah was in line with weakening currencies of other countries were also characterized by the inflation rate of 3.35% which was the lowest inflation in the last 5 years since 2000.

The domestic economic condition also still could not be expected as a result of demand for exports is likely to decline due to global demand was still poor and falling of commodity prices on the international market.

During 2015, the Company`s financial performance was not very encouraging due to decreasing of world crude oil prices and the cost of raw materials and the weakening of the rupiah against the USD. The company posted net sales decline by 30.8% from USD 449.1 million in 2014 to USD 310.9 million in 2015. The decrease in net sales was caused by the decrease in selling prices in all segments of polyester and ethylene glycol and derivatives. In addition, the Company`s production was also reduced because Tangerang Plant Sites stopped operating.

Based on the segmentation of product sales in 2015 was as follows: polyester USD 99.1 million, down 45.6% from USD 182.2 million in 2014; chemical USD 162.7 million, down 22.8% from USD 210.7 million in 2014; and nylon yarn USD 49.0 million, down 12.8% from USD 56.2 million in 2014.

Based on the market, sales in 2015 was as follows: local sales of USD 268.8 million, down 30.5% from USD 386.8 million in 2014; and export sales of USD 42.1 million or a decrease of 32.5% from USD 62.4 million. The export markets cover countries of Asia, Europe, Australia, and the United States.

Fluctuations in prices of raw materials and crude oil prices were not accompanied by fluctuations in selling prices proportionately; causing the Company recorded a gross loss of USD 15.6 million in 2014, wherein gross loss of USD 15.0 million in 2015 or decreased by 3.8%. Meanwhile, the company`s cost of goods sold decreased from USD 464.7 million in 2014 to USD 325.8 million in 2015. It was decreased by USD 138.9 million or a decrease of 29.9%.

For the current year, the Company posted a net loss of USD 24.2 million in 2015 and a net loss of USD 24.3 million in 2014.

With the progress of such financial condition, the Company was trying to retain and even continued to improve operating performance in line with the demands of the market demand both domestically and internationally.

In 2015, although the Company faced financial conditions that more difficult than the previous year, the Company remained commit to give its best effort, by meeting market demand and producing products that also provide benefits for the Company.

For 2016, the Company has programs namely:

  1. Implement the catalyst changing by using "high selectivity catalyst" in the MEG, Merak Plant Sites which enables to increase the efficiency of raw material of ethylene usage and to produce more competitive products so as to increase the value of sales.
  2. Using Methane as ballast or supporters of the reaction system that can optimize catalyst performance as an effort to save raw material of ethylene consumption.
  3. Debottleneck for MEG Plant as an effort to increase capacity from 216,000 tons to 246,000 tons per year.
  4. Replace the cooling system at the Polyester Plant area by using the "humidity build up" as efficiency efforts of power consumption.

Thus, we are optimistic that the Company will be able to make efforts for the progress of the Company. We are fully aware that the company`s success can be achieved with fixed focus and utilization of human resources, asset management efficiently, and maintain good relationships with customers and suppliers that also provide a solid base in the company in exploring potential markets.

In closing, we wish to express our sincere gratitude to all employees, business partners, creditors and shareholders for the consistent support over the years. Without this, we are unlikely to achieve a result like today.

We believe with the support, confidence and their ongoing dedication we will continue to grow and develop both operationally and financially in the future.

 

Thank you.