Western Cape Business News

Send  Share  RSS  Twitter  01 Jun 2009

MANUFACTURING: Heavy Petting By Hosaf


Recent Western Cape Business News

HOSAF’s newly expanded PET resin project looks ready for the big time.

The PET resin plant re-started last month after being shut-down mid-February to complete a major expansion project.

Milnerton-based Hosaf, owned by JSE listed industrial conglomerate KAP International, which initially specialised in fibre, has in recent years started successfully focussing on manufacturing and distributing polyethylene terephthalate resin (PET) for the bottling and packaging market.

Last year CBN reported that KAP International had spent R85 million in the year to end June to boost PET capacity at Hosaf. At that stage a further R112 million had been set aside to complete the expansion project – including the setting up of independent power generators.

Naturally some observers have worried about KAP over-committing to Hosaf in light of the slump in global economies and the tightening of trading conditions locally.

But in March KAP International CEO Paul Schouten said Hosaf – which managed operating profit in line with the previous year - was currently experiencing strong demand for its products.

KAP International has previously argued that the expansion project – which effectively doubles PET resin production would set Hosaf up as the dominant player in the SA market. Annual production volumes will top 120 000 tonnes.

Profits will no doubt also be helped by the dramatic fall in the price of crude oil in recent months.

KAP International reckons the growth in local demand for PET resin shows no sign of slowing as the packaging industry recognises the benefits of PET on the basis of cost, durability and clarity.

At this stage Hosaf is one of only two producers of PET resin in SA. Hosaf, according to KAP International’s website, holds a 50% market share in South Africa. Hosaf supplies PET resin to Cape Town-based XAC-Pet (a major supplier to ABI, which bottles Coca-Cola), Boxmore and the Astrapak group with the balance being exported.

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