Sumalindo's profit drops due to tumbling demand<\/p>\n
JAKARTA (JP): Decreasing demand and fierce competition from
\nMalaysian plywood producers have slashed the profit of PT
\nSumalindo Lestari Jaya and prompted it earlier this year to
\nacquire the shares of a medium density fiberboard (MDF) firm.<\/p>\n
Sumalindo's president, Winarto Oetomo, told reporters after an
\nannual stockholders meeting yesterday that the company's sales
\nrevenue decreased by 11 percent to Rp 237.4 billion (US$106.4
\nmillion) in 1994, while its profit also dropped by 11 percent to
\nRp 32 billion.<\/p>\n
Out of last year's profit, 39.04 percent or Rp 12.5 billion
\nwould go to shareholders as dividends -- at Rp 100 per share --
\nwhile the remaining Rp 19.5 billion would be used to expand the
\ncompany's activities.<\/p>\n
Palgunadi Tatit Setyawan, a company director, explained that
\nMalaysia, which is a new comer on the world's plywood market and
\ncurrently has the advantage of tariff preference from the United
\nStates, is a major plywood importer.<\/p>\n
However, he was optimistic that Malaysia would soon reach the
\npoint where it could no longer enjoy the privilege, giving way to
\nIndonesian exports again.<\/p>\n
Winarto was also optimistic that the end of recession in major
\nimporter countries would boost Indonesia's plywood exports again.<\/p>\n
Sumalindo, a subsidiary of PT Astra International and PT
\nBarito Pacific Timber, currently exports 90 percent of its
\nproducts, mostly plywood. Its major importers include Japan, the
\nUnited States and European countries.<\/p>\n
No figures on exports were available yesterday from Sumalindo.
\nEarlier reports show, however, that Indonesia's plywood export
\nprices dropped from an average of $474 per cubic meter in 1993 to
\n$457 in 1994 and to $390 at present. The country's revenues from
\nplywood exports also dropped by nearly 12 percent from $4.22
\nbillion in 1993 to $3.72 billion last year.<\/p>\n
MDF<\/p>\n
Winarto asserted that Sumalindo, which produced only 205,000
\ncubic meters of plywood last year from its installed capacity of
\n250,000 cubic meters, would not rely solely on plywood as a major
\nincome earner.<\/p>\n
\"In the future, part of the plywood market will be taken over
\nby the MDF industry and plywood will become a luxury good,\" he
\nsaid, adding that both materials had advantages of their own and
\nin many cases one could not replace the other.<\/p>\n
Sumalindo, he said, would continue to expand its activities to
\nthe medium density fiberboard industry, while continuing to
\nmaintain its present share in the plywood market.<\/p>\n
Sumalindo, therefore, signed an agreement in January to
\nacquire a 75 percent stake of PT Nityasa Mandiri, a medium
\ndensity fiberboard company at Rp 26.25 billion, he said.<\/p>\n
Nityasa Mandiri is currently building three medium density
\nfiberboard plants, the first of which is expected to start
\noperation early next year, he added.(pwn)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/sumalindos-profit-drops-due-to-tumbling-demand-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}