Argo Pantes doubles annual capacity to 24 million yards

JAKARTA (JP): Publicly listed PT Argo Pantes integrated textile industry has more than doubled the annual capacity of its dyed-yarn fabric from 10.5 million yards to 24 million yards, the company's president Chan Wing Wah said over the weekend.

"We designed the additional capacity mainly to meet the international market demand for finer-quality fabric," Chan said.

Argo Pantes which operates textile plants in Tangerang and Bekasi, West Java, produced 10.5 million yards of fabric last year to make such well-known branded garments as Arrow, Choya, Kenzo, Marks & Spencer, Elle and Van Heusen, he said.

He said the capacity expansion was part of Argo Pantes' massive machinery restructuring which last year emphasized the dyeing and finishing units.

"For this year, machinery restructuring in our spinning industry will involve an investment of US$35 million," said Chan.

Argo Pantes Financial Director Wira Tjendana said the company would also continue to restructure its capital by amortizing high-interest, short-term debts.

"The capital restructuring is made through the issuance of $250 million in medium-term notes by Argo Pantes Finance BV," he said.

The first tranche of the notes, amounting to $38 million of floating rate notes (FRN), was issued under a syndication agreement signed in Bali Saturday.

"The notes were 52 percent oversubscribed which reflects the high international confidence in Argo Pantes," Wira said.

He said the syndication was led by Societe Generale Asia Ltd. and included nine other international banks -- Union Bank of Switzerland, May Bank, Korean Long Term Credit Bank, AB Capital Market Ltd., Coryo Mechant Bank Ltd., Gyongnam Merchant Banking Co., Kumho Merchant Bank, Shinhan Investment Bank and Korean Forex Banking Corporation.

Wira added that Argo Pantes recorded total sales of Rp 449 billion (US$188.65 million) last year, of which 67 percent were generated by exports to 40 countries.

"We expect total sales to increase to Rp 500 billion this year with a projected net earnings of Rp 30 billion," Wira said. (vin)