Indofood will acquire Bogasari from Indocement<\/p>\n
JAKARTA (JP): The well-diversified Salim Group plans an
\ninternal acquisition through the transferal of PT Bogasari Flour
\nMill's assets from PT Indocement Tunggal Prakarsa to its food
\ndivision, PT Indofood Sukses Makmur.<\/p>\n
Directors of Indocement and Indofood told a joint press
\nconference here yesterday that the acquisition plan is still
\nsubject to the approval of the government and the minority
\nshareholders.<\/p>\n
Indofood is 50.1 percent owned by Indocement. Both companies,
\nwhich are controlled by the Salim Group, are listed on the
\nJakarta and Surabaya Stock Exchanges. Public shares account for
\n2.1 percent in Indofood and 10 percent in Indocement.<\/p>\n
When asked, the directors refused to state the value of the
\nplanned acquisition, saying that could be announced after it is
\napproved by the authorities and minority shareholders.<\/p>\n
\"An independent appraiser is still accessing the value of
\nBogasari's assets and liabilities. What I can assure is that the
\nprice settled on will be deemed fair by both parties,\" said Eva
\nRiyanti Hutapea of Indofood.<\/p>\n
Indocement acquired Bogasari in 1992 at US$414.6 million.<\/p>\n
Eva noted that Indofood will explore fund-raising measures,
\nincluding debt accruing and equity improvement, to finance the
\nacquisition. \"We consider issuing right shares as one possibility
\nto raise funds,\" she added.<\/p>\n
Monopoly<\/p>\n
She said the planned acquisition of Bogasari, which
\npractically holds a monopoly in wheat milling domestically, will
\nenhance Indofood's standing as the largest integrated food
\nmanufacturer in the country.<\/p>\n
Indofood, which owns and operates 22 food processing plants in
\nvarious provinces, claims to hold a 90 percent market share for
\ninstant noodles in Indonesia, about 60 percent for both snack and
\nbaby foods and another 50 percent for coffee and other products.<\/p>\n
The company recorded a 190 percent increase in its after-tax
\nprofit to Rp 145.6 billion during the January-September period of
\nlast year over the corresponding period of 1993.<\/p>\n
Eva disclosed that the company's unaudited after-tax profit
\nfor last year soared to Rp 220 billion. \"For this year, we
\ninitially expect to get some Rp 300 billion in after-tax profit,
\nbut because of the acquisition,\" she added.<\/p>\n
Sudwikatmono of Indocement specified that Bogasari's milling
\nplants in Jakarta and Surabaya, East Java, have a combined
\nproduction capacity of 2.5 million tons of flour per annum. Its
\ncapacity is projected to increase by 40 percent by the year 2000.<\/p>\n
Bogasari also controls the management of a flour milling plant
\nowned by PT Berdikari Sari Flour Mill in Ujungpandang, South
\nSulawesi, with an annual production capacity of 800,000 tons.<\/p>\n
Sudwikatmono denied allegations that Bogasari monopolizes
\nflour milling in the country, saying that since 1993 the
\ngovernment has allowed other private companies to set up flour
\nmilling plants.<\/p>\n
The government has approved the construction of three new
\nflour milling plants in Medan, North Sumatra; Semarang, Central
\nJava, and Cibinong, West Java. \"However, I never heard whether
\nthey have started the construction of their projects,\"
\nSudwikatmono said.<\/p>\n
Bogasari gets wheat from the National Logistics Agency, which
\nmonopolizes the importation and distribution of wheat and other
\nagricultural products. Bogasari pays the agency after its
\nproducts are marketed.<\/p>\n
Sudwikatmono said Bogasari currently owes Rp 94 billion ($42.7
\nmillion) to the logistics agency in the form of wheat stocks.<\/p>\n
He noted that the sale of Bogasari's assets will give
\nIndocement fresh money for paying its debts and for financing its
\nplanned expansion program and the major modification of its
\ncement plants.<\/p>\n
\"The sale of Bogasari to Indofood will allow Indocement to
\nhave a business structure that is more focused on its core
\nbusiness -- cement manufacturing,\" Sudwikatmono said.<\/p>\n
Indocement, the country's largest cement producer, plans to
\nincrease its annual production capacity from 9.4 million tons at
\npresent, almost 50 percent of the country's total output, to 14.5
\nmillion tons by the end of 1997.<\/p>\n
Sudwikatmono predicted that the annual cement crises will
\noccur until 1997, when the expansion projects of a number of
\nleading cement factories are expected to reach completion.<\/p>\n
Benny S. Santoso, the executive director of Indocement, noted
\nthat its unaudited after-tax profit reached Rp 360 billion last
\nyear, of which Rp 95 billion was contributed by Bogasari.
\nIndocement's 1993 profit was recorded at Rp 312.4 billion. (rid)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/indofood-will-acquire-bogasari-from-indocement-1447893297",
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