Western Cape Business News

Send  Share  RSS  Twitter  21 Nov 2008

MANUFACTURING: Hosaf's PET Looks Promising


Recent Western Cape Business News

BIG things are afoot at specialist fibre and textile manufacturer Hosaf as the Milnerton-based company builds capacity at its PET resin plant.

Hosaf manufactures and distributes PET resin for the bottle and packaging market – adding a new and lucrative operational angle the company’s traditional polyester staple fibre offerings.

Already last year things appeared to be picking up with Hosaf pushing the utilisation of its polymer facilities, increasing capacity in the plant by 14% (which meant a PET capacity of 60 000 tonnes a year).

While things look a tad threadbare for the fibres business, Hosaf predicted last year that growth in local PET resin demand would continue at around 8% per annum.

At that point Hosaf was keen to take advantage of buoyant conditions, and pencilled in PET sales growth of around 13% for 2008.

But Hosaf – or rather its parent company KAP International – had to fork out for capital expenditure. An investment of approximately R100 million was set aside to increase capacity in a project due for completion at the end of the year.

KAP International believed the capacity expansion would position Hosaf as the dominant player in the South African market, and not only allow the company to take advantage of the continuing increase in demand for PET resin in SA but also overseas.

For the record Hosaf’s Cazeden A PET is a top quality thermoplastic material for injection stretch blow moulding and injection blow moulding of bottles for carbonated soft drinks, mineral water, edible oil, fruit juice, the pharmaceutical industry, dairy products and cosmetics.

Other applications include sheet extrusion, thermoforming of extruded sheets for food packaging, as well as industrial strap extrusion.

Recent results from KAP International disclosed that capital expenditure in respect of the Hosaf expansion topped R85 million during the year to end June 2008. But a further R112 million has now been earmarked for the completion of the project - including the setting up of independent power generators.

KAP International’s CEO Paul Schouten noted that despite challenges posed by high oil prices and electricity load shedding, the Hosaf division produced a “solid operational performance on the back of continually growing demand for its PET products and an excellent performance at plant level.”

He said additional capacity was currently being installed and the new look Hosaf plant would be fully operational by March 2009.

Schouten was confident the Hosaf expansion would result in a significant boost to the operating profit for KAP International in the 2009/2010 financial year.

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