Heinz ties up with ABC in joint venture<\/p>\n
JAKARTA (JP): U.S. food giant H.J. Heinz Company announced on
\nFriday the formation of a joint venture with PT ABC Central Food
\nIndustry, Indonesia's biggest producer of food sauce and drink
\nconcentrate.<\/p>\n
The Pittsburgh, Pennsylvania,-based company bought a majority
\nstake in ABC and renamed the joint venture PT Heinz ABC
\nIndonesia, it said in an announcement at Gran Melia Hotel.<\/p>\n
Neither party was willing to disclose the value of the deal or
\nthe percentage of the stake purchased, but ABC retains a
\nsignificant minority share.<\/p>\n
"It is significant enough that Kogan Mandala (president of the
\nformer ABC Central Food) will retain his chief executive
\nposition...," Heinz representative Lowell Gruman, who will be a
\ndirector in the new company, told reporters.<\/p>\n
Lowell said the investment decision was based on Heinz's long-
\nterm view on the country and understanding that a 200-million
\npopulation was a critical market.<\/p>\n
He also mentioned Indonesia as a possible production platform
\nfor Heinz brands throughout the Asia Pacific.<\/p>\n
"Let me assure you that this is not an opportunistic
\ntransaction," he said, stressing Heinz was not taking advantage
\nof the crisis to buy shares cheaply.<\/p>\n
He added the share valuation of ABC Food was based on the
\ncompany's excellent performance for a period of more than five
\nyears, while flat growth in production over the last two years
\nwas not a significant factor.<\/p>\n
Kogan said ABC was not experiencing financial difficulties.
\n"The joint venture is not at all some type of restructuring."<\/p>\n
Heinz's first contact with ABC came in 1995, and it endeavored
\nto show the Indonesian company it could be its best partner,
\nLowell said.<\/p>\n
"Then in 1997 the crisis hit. Heinz came to Indonesia and
\n(has) watched the whole economy for two years now. Many companies
\nhave had a hard time but they survived, including ABC."<\/p>\n
Kogan said ABC realized after much consideration that the
\ncompany could be strengthened by Heinz's sophisticated technical
\nsupport and international marketing skills.<\/p>\n
ABC has a relatively small volume of exports, he said. "Heinz
\nwill help us go global."<\/p>\n
In addition to Jakarta, ABC has factories in Krawang, West
\nJava, and Surabaya, East Java. ABC's product lines include sweet
\nsoy sauce, chili sauce, tomato ketchup and drink concentrate.<\/p>\n
Lowell said there would be no layoffs of the 3,000 employees.<\/p>\n
Heinz earned US$10 billion in revenue last year from about
\n5,000 food products, including the world's best selling tomato
\nketchup.<\/p>\n
Heinz has 50 affiliates in 200 countries, among them Japan,
\nSouth Korea, Thailand and China. (02)<\/p>",
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"sponsor": "Okusi Associates",
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