Asahimas expects 15% profit rise

JAKARTA (JP): Publicly-listed PT Asahimas Flat Glass expects only a 15 percent increase in its sales and profits this year due to limited production volume.

The expectation, however, is in line with an estimate of 10 to 20 percent growth of glass demand on the domestic market.

Asahimas' president, Margono Djojosumarto, estimates that safety glass usage in the country will grow by 15 to 20 percent this year, while the demand for flat glass will grow by 10 to 15 percent.

"I should say that we do not expect any capacity expansion this year, meaning that the sales volume may not change much from last year's level," Margono said.

"We also realize that 1996 is proving to be a tough year for the automotive market as an impact of the government's deregulation giving tax brakes to PT Timor Putra Nusantara, which plans to produce a national car," he said. "This situation, of course, will affect our sales of safety glass.

"But we will increase the production of high quality and specialty glass."

High quality and specialty glass accounted for 40 percent of the company's total sales of 374,300 metric tons last year.

Asahimas recorded a 39 percent increase in net sales to Rp 403 billion (US$172 million) last year and a 65 percent rise in net profits to Rp 73.7 billion.

Sales from high quality and specialty glass last year reached Rp 151 billion, up by 73 percent from the previous year.

"I would say that the rise in total sales was attributable to the 13 percent increase in prices and a higher production capacity after our third furnace operated fully last year as well as a change in product mix," Margono noted.

He said that in line with projections. Asahimas, in the first quarter of this year, booked Rp 18.4 billion in net profits, up by 36 percent from the same period last year.

Net sales reached Rp 92 billion in the January-March period, he said.

He added that next year, the company's production capacity of flat glass will increase to 570,000 tons due to the operation of its fourth production unit in the East Java capital of Surabaya, which is now under construction with a capacity of 150,000 tons per annum.

The company will also see an expansion of its safety glass production capacity next year by an additional 1.5 million square meters per annum when its new factory in Cikampek starts operation.

The current production capacity of safety glass is 1.7 million square meters per annum. (alo)