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What are the challenges facing the nylon yarn industry? How can the government help?
In Indonesia at least, the challenges facing the nylon yarn industry is the lack of demand compared to polyester and the expensive energy cost. Gas prices in Indonesia are close to $9/MMBTU which is almost double than that of Singapore, the nearest neighboring country. Electricity in Indonesia is still very unstable as the total supply still falls below the actual demand that the country needs. Unfortunately, due to certain environmental requirements that prohibit factories in investing in coal power plants near residential areas, we have to use gas engines to supply the energy to our mills. In addition, nylon is a very niche synthetic product; compared to polyester supply, it is still considered small. Indonesian customers are price sensitive and will prefer to use polyester compared to nylon; simply due to price, and not because of the properties. Fortunately, yarn imports are more regulated compared to fabric imports as there are still a large number of 'illegal' fabrics coming in from all over the world. This has impacted the prices of both polyester and nylon fabrics in the local market.
What kind of innovations in machinery yarn makers do you look for?
In terms of yarn machinery, ideally fully automated and energy saving would be the machines that we look out for. Again, for spinning there is only so much development that can be done; so, to be more competitive in both the local and global markets, the only way is to reduce our costs in production.
Please share details of your last two fiscals, and the factors affecting your performance.
Revenue for 2014: +/- $47 million; revenue for 2015: +/- $37 million; revenue for 2016: unable to disclose as financials have not been released to the public. The volatility of nylon yarn prices have affected our sales figures significantly as sales quantity year-on-year has been relatively stable and consistent with single digit growth for our company.
What are the near-future plans at Ever Shine Tex? Are you working towards developing any new products or expanding your capacities?
In the short term, both the yarn and fabric divisions of Ever Shine Tex plan to develop in new and differentiated products to open new markets that are not based on price. Our own development team has also created a cotton-like fabric using our very own nylon yarns, and also stretch fabrics using our own yarns that we have developed without having to use spandex. However, to also keep ourselves competitive in the existing market, we have plans to renew and upgrade our machines to be more cost-efficient as mentioned earlier keeping our capacities as it is.
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