SINGAPORE-N.V. Bekaert S.A. will improve its steel cord output in Indonesia and India after pledging two years ago to replace capacity lost in Asia when the company sold majority ownership in its Japanese venture to Bridgestone Corp. Bekaert initially will increase its production 5,000 metric tons per year in Indonesia and 4,000 metric tons per year in India. These projects are in addition to expansions totaling more than 25,000 tons that were announced last year in the U.S., Australia, Brazil and Turkey.
Both projects' second phases will add another 11,000 metric tons of capacity to each plant, a spokesman said. The Indonesian project eventually may allow the plant to expand up to 30,000 tons.
The Indonesian unit will become Bekaert's production site for the Association of Southeast Asian Nations regional marketplace-Indonesia, Malaysia, Philippines, Thailand and Singapore. Tariffs for steel cords are being reduced gradually and are scheduled to be phased out by 2003.
Final site selection is still under way for both projects, a spokesman said.
In Indonesia, the new unit will be located in West Java, near the country's main tire producers. Bekaert has budgeted $20 million for the project's first stage, which is scheduled to begin production by the end of 1997. Total investment may reach $65 million over several years.
Bekaert's is one of three steel cord capacity projects announced recently in Indonesia and one of about 20 such projects licensed by Indonesian authorities, a spokesman said.
The Indian project, with an initial budget of $16 million, will come on stream in the first half of 1998, Bekaert said. The firm is focusing on the southwestern part of India as a possible site for the new facility.
Bekaert also operates China Bekaert Steel Cord Co. Ltd. in Jiang Yin, China. This unit also is being expanded by an undisclosed amount. The plant currently boasts a capacity exceeding 9,000 tons.
The new projects coincide with the release of Bekaert's fiscal 1995 results. Sales of steel cord products rose 2.8 percent during the period to $1.31 billion. Bekaert estimates currency fluctuations vs. the Belgian franc had a negative impact of about 5 percent on sales.
Sales volume increased 11.1 percent to 542,000 tons; demand rose 15.6 percent for steel cord for radial tires, and 13 percent for steel wire for hose reinforcement.
On the other hand, demand from conveyor belt makers-traditionally 3 percent of Bekaert's annual sales-fell 25 percent after expanding 43 percent the year before.
In 1995 Bekaert produced more than 229,000 tons of tire cord, representing 22 percent of global demand.
The company spent more than $118 million in each of the past two years on capital expenditures. The firm also devotes up to 10 percent of its steel cord sales on research and development. This spending, coupled with the newly announced projects, reflects Bekaert's conviction that steel cord is the tire reinforcement of the future, the firm said.
``According to recent studies,'' the firm wrote, ``any threat from synthetic fibers, if it ever existed, has clearly diminished.''