Indorama's Exports Not Affected by Egyptian Turmoil

Exports of PT Indorama Synthetics Tbk (INDR) are not influenced by Egypt's current political condition since the amount is relatively small. In 2010, Indorama's total textile and textile product exports to Egypt were only US$ 12 million.

VS Baldwa, Company Secretary of Indorama Synthetics Tbk, said that the condition will not disturb the company’s exports, so the revenue will not be affected significantly. In fact, Egypt is not Indorama's main export target. The company exports more to Turkey. “Egypt is not a big market for textiles,” he said to IFT.

Indorama scored a revenue of US$ 447.57 million until the third quarter of 2010, an increase of 26 percent compared to the same period in 2009. The company’s gross profit was up 69.4 percent from US$ 21.6 million until the third quarter of 2009 to US$ 36.6 million until the third quarter of 2010. This increase was due to a reduction in Cost of Goods Sold at 23 percent. However, Indorama’s net profit dropped by 1.7 percent from US$ 11.4 million to US$ 11.2 million.

Based on data from the Indonesia Textile Association (API), Indonesia's textile exports to Egypt in 2009 were US$ 85 million. The biggest portion of exports in 2009 were thread products valued at US$ 59 million, garments at US$ 12 million, and cloth at US$ 11 million. In 2010, total textile exports to Egypt was at US$ 180 million.

Ade Sudrajat, General Chairman of Indonesia Textile Association, said that the upheaval in Egypt will not affect the national textile exports should the unrest goes on longer. “We are still monitoring textile demands from Egyptian importers,” he said.

He explained that the thread export trend to Egypt has grown 20 percent per year in the last five years, while cloth exports grow 50 percent. “But the largest portion is still dominated by thread," he added. He also said that the condition in Egypt is predicted to go back to normal by mid March 2011.

The Association targets national textile exports to go up by 33 percent at US$ 15 billion in 2011, compared 2010's US$ 11.2 billion. Data from the Ministry of Industry shows that textile industry exports were valued at US$ 10 billion in 2010 with the increasing market demand and local product quality. In 2009, textile industry exports were valued at US$ 9.26 billion which placed the sector as the second largest foreign exchange earner after non oil and gas sectors.