Polyplex renews film project

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Although Polyplex (Thailand) Public Co. Ltd. is re-evaluating a $70 million PET film expansion in terms of scope, location and technology, it is committed to reviving the project, which was put on hold in the second half of 2008 due to the economic downturn.

The firm also said it is proceeding with a related, $22 million silicone coating line at its complex in Pluak Daeng, Thailand — east of Bangkok. Located in that same complex are an extrusion coating operation and polypropylene cast film manufacturing.

Polyplex Chairman Manu Leopairote said the market has shown improvement since March 2009 but the company has been extra cautious to ensure sustainability in film demand.

In May 2008, Polyplex's board had approved the PET film investment, along with an associated polyester chip and metalized film line, in Thailand.

In the firm's annual report, Manu said Polyplex does not want to lose an opportunity to capture marketplace growth. As it is, the firm expects an increase in its own in-house requirements for plain polyester film, which would limit the PET film available for commercial sale. That situation eventually might restrict supplies to existing customers.

Manu said Polyplex's additional investment in downstream value-added products, especially the silicone coating line and the ramp-up of the extrusion coating line, will require more film.

For financing, Polyplex has proposed to borrow up to 75 percent of the project investment and has been receiving support from its existing bankers as well as new financial institutions. The firm has ordered machines for the silicone line, with intent to start it sometime in 2011 or 2012.

The line capacity will depend on the product mix run, but production will be for exports markets in Asia, Europe and the United States — especially release liners for label liners, graphic arts, medical liners and shingle-tape applications.

Polyplex has arranged a $16.5 million long-term loan to help finance the project, while the balance cost would be met through internal accruals.

Manu said the project will boost diversification in the firm's current PET film business.

“This project would also help us in differentiating ourselves with other Asian film producers, none of whom are present in the siliconizing business,” he said. “We will have the advantage of an integrated facility, in comparison with stand-alone siliconizing producers in Europe and the U.S., due to a more competitive cost structure.”

Polyplex said it is also making an investment of $3.1 million to $4.6 million during the next 12-15 months to improve productivity, reduce losses, develop products and enhance quality control.

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