Budi Acid Jaya acquires two firms to raise output<\/p>\n
JAKARTA (JP): PT Budi Acid Jaya (BAJ) of the Sungai Budi
\nGroup, a publicly-listed tapioca producer, has acquired two firms
\nto increase its citric acid output by 66.6 percent and diversify
\ninto modified tapioca starch production.<\/p>\n
The company's shareholders yesterday approved the Rp 40.88
\nbillion (US$17.4 million) acquisition in an extraordinary
\nmeeting.<\/p>\n
BAJ bought all the assets of PT Budi Acid Makmur (BAM), a
\ncitric acid producer, for Rp 35 billion, according to a brief
\nstatement after the shareholders' meeting.<\/p>\n
It also acquired 50 percent of the total shares of PT Budi
\nRaisio International (BRI), a producer of modified tapioca
\nstarch, which was owned by the Raisio Group of Finland.<\/p>\n
Both companies were BAJ affiliates.<\/p>\n
BAJ president Santoso Winata said that by acquiring BAM, his
\ncompany would be the largest producer of citric acid in Southeast
\nAsia because it would be able to increase its production by 66.6
\npercent to 25,000 tons a year from 15,000 tons a year.<\/p>\n
Citric acid is a preservative used in drinks, medicine and
\nvitamins. It is also used to refine cooking oil, and as a raw
\nmaterial in detergent.<\/p>\n
He did not elaborate on the company's production of modified
\ntapioca starch, which is used to make paper. But he said PT BRI
\nwould get a $2 million interest-free loan from its former
\nshareholders -- Widarto and himself -- to produce the starch.<\/p>\n
"Our business' diversification is aimed at anticipating the
\nrapid growth in paper demand," he said.<\/p>\n
The company expects the acquisition will increase its net
\nprofit next year.<\/p>\n
BAJ's net profit tripled to Rp 30.23 billion last year from Rp
\n10.02 billion in 1994. "This resulted from an increase in our
\ntotal sales to Rp 148.6 billion last year, compared to Rp 73.6
\nbillion in 1994," he said.<\/p>\n
The higher sales and net profits resulted after the company
\nacquired six tapioca factories, owned by the Sungai Budi Group,
\nlast November.<\/p>\n
The acquisition allowed the company to expand its tapioca
\nproduction capacity from 225,000 tons to 510,000 tons a year.<\/p>\n
Tapioca contributed 75 percent of the company's total sales
\nrevenue last year, citric acid contributed 20 percent and
\nsulfuric acid 5 percent. (bnt)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/budi-acid-jaya-acquires-two-firms-to-raise-output-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}