Astra International plans huge investment<\/p>\n
JAKARTA (JP): Astra International, Indonesia's largest
\nautomotive assembler, plans to invest about Rp 3 trillion (US$1.3
\nbillion) over the next five years in anticipation of tougher
\ncompetition in the country's automotive vehicle market.<\/p>\n
T. Permadi Rachmat, the company's president, said yesterday
\nthat the massive investment program would concentrate on
\nautomobile and motorcycle manufacturing.<\/p>\n
\"This is part of our business strategy to anticipate the free
\ncompetition era in the ASEAN market,\" he told journalists after
\nthe annual shareholders' meeting of the company, which has widely
\ndiversified its businesses.<\/p>\n
Member-countries of the Association of Southeast Asian Nations
\n(ASEAN) -- Brunei, Indonesia, Malaysia, the Philippines,
\nSingapore and Thailand -- are committed to trade liberalization
\namong themselves by 2003.<\/p>\n
Rachmat said that Astra's business strategy included the
\nestablishment of manufacturing units in other developing
\ncountries.<\/p>\n
One of the planned overseas units will soon be established in
\nVietnam in cooperation with Daihatsu of Japan and local partners.<\/p>\n
\"The agreement on the establishment of the joint venture was
\nsigned last week,\" he said, adding that the joint venture, with
\nan initial investment of about US$35 million, was designed to
\nproduce about 3,000 vehicles per year.<\/p>\n
The joint venture, which is 26 percent owned by Astra, 31
\npercent by Daihatsu and another 43 percent by Vietnamese
\npartners, is expected to contribute significantly to the growth
\nof Astra's future earnings.<\/p>\n
Growth<\/p>\n
Rachmat said that Astra, which controls about 55 percent of
\nthe domestic automobile market, is projected to book steady
\ngrowth in its sales this year even though the recent surge in the
\nJapanese yen would cause a rise in prices of between 12 and 15
\npercent.<\/p>\n
Astra, a publicly-listed business group which operates about
\n200 subsidiaries and employs some 83,000 people, booked an
\nincrease of almost 100 percent in its net earnings in the first
\nquarter of this year to Rp 92.5 billion, as compared with Rp
\n47.26 billion gained in the same period of last year.<\/p>\n
According to its 1994 consolidated financial reports, its net
\nprofit rose by around 110 percent to over Rp 279 billion
\n(US$126.8 million) in 1994 from Rp 132.37 billion in 1993.<\/p>\n
The earnings per share of the group, which is listed on
\nJakarta and Surabaya stock exchanges, rose by over 100 percent to
\nRp 247 per share in 1994 from Rp 137 in 1993 as a result of the
\nhigher profits.<\/p>\n
Yesterday's meeting approved a proposal to pay a cash dividend
\nof Rp 80 per share.<\/p>\n
Astra's consolidated net sales rose by 51 percent to Rp 8.88
\ntrillion (around $4 billion) from Rp 5.88 trillion a year
\nearlier, while net revenues of its financial subsidiaries rose to
\nRp 621.1 billion from Rp 537.1 billion.<\/p>\n
Rachmat said Astra, which is also engaged in financial
\nservices, the wood-based industry, agribusiness, electronics and
\nheavy equipment, should give place greater emphasis on its core
\nbusiness to enable it to compete with car producers from other
\nASEAN countries.<\/p>\n
He did not name Astra's potential competitors but car analysts
\nsaid yesterday the competition would come from non-Japanese car
\nassemblers in Europe, the United States and other Asian
\ncountries, which have apparently developed a stronger presence to
\nstrengthen their market foothold in most of ASEAN countries.<\/p>\n
Hyundai and KIA, two major South Korean automobile producers,
\nfor example, are now working to establish manufacturing units in
\nIndonesia as their production bases in the region.<\/p>\n
Analysts said that the continued surge in the value of the yen
\nwould give non-Japanese producers a stronger competitive edge
\nagainst Astra, which mainly assembles Toyota and Daihatsu
\nvehicles.<\/p>\n
The annual shareholders' meeting, which was also attended by
\nchief commissioner A.R. Ramly, a former Indonesian ambassador to
\nthe United States, and vice chief commissioner Winarto Soemarto,
\nwho is also the president of the state-owned Bank Negara
\nIndonesia (BNI), endorsed the group's 1994 balance sheet. (hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/astra-international-plans-huge-investment-1447893297",
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