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Home arrow Latest News arrow Encouraging Added Value Products, Asia Pacific (POLY) Projections to Grow 10% in 2020


				
			
			
Encouraging Added Value Products, Asia Pacific (POLY) Projections to Grow 10% in 2020 PDF Print E-mail
Written by Maizer   
Wednesday, 15 January 2020

PT Asia Pacific Fibers Tbk (POLY) still sees an opportunity to grow its upstream Textile and Textile Products (TPT) business in 2020. The company claims that it will focus more on hoisting sales in the added value product segment.

 

"The era of commodification is over, so we have to widen segments and markets," said Prama Yudha Amdan, Head of Corporate Communications and Public Relations, Value-added products have many advantages, because the company's customers usually ask to customize certain products. Where the selling price is not fixed with the price of regular products that depend directly on the ups and downs of the price of raw material for filament fiber. So producers such as POLY have a bargaining position to determine the selling price.

 

In addition the company will be able to get better profit margins with added value products. Now POLY has produced a variety of value-added products such as anti-bacterial yarns, refractory fibers and automotive fibers. Previously the management said, the export sales volume portion of 40% would be filled with these value-added products. Regarding exports, it happens that the company has exported to many countries from the United States (US) to Europe and the Middle East. The export portion of 25% -30% of total sales is considered to provide good profit margins. The management hopes that the market can be more conducive and this TPT upstream manufacturing can contribute to the country's foreign exchange.

 

Regarding the growth projection this year, Prama said the company is still aiming for a conservative target of 10%. The target may change, bearing in mind the government plans to realize a decline in industrial gas prices in March 2020. However, management said a new projection of whether it would be more positive would be seen in the second quarter of this year, where the decline in gas prices was applied. Reviewing POLY's financial statements, sales during the third quarter of 2019 were valued at US $ 312.68 million, down 12.7% compared to the same period the previous year of US $ 358.3 million. Management said the decline in sales was due to the weakening selling price of the product. This is caused by the decline in Indonesia's economic conditions in general and parts of the world.

 

In addition, consumption of polyester in China has decreased so that it is diverted through exports to other countries including Indonesia. Furthermore it is known that POLY's cost of goods sold also decreased by 11.2% year on year (yoy) to US $ 290.04 million by the end of September 3019. Shrinking expenses have not been able to help increase profits due to eroded income. So that the gross profit recorded in the third quarter of 2019 was US $ 22.63 million, down 27% compared to the same period last year of US $ 31.36 million. Meanwhile, other expense posts also eroded the acquisition of POLY's bottom line, as a result until the first nine months of this year the company posted a net loss of US $ 3.16 million. Even though in the third quarter of last year the company still recorded a net profit of US $ 16.78 million.

 

 

 
		
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