Astra names Ruslim president

Astra names Ruslim president

PT Astra International, Indonesia's, biggest automobile distributor, named Vice President Michael Ruslim its next president, replacing outgoing president Budi Setiadharma.

Ruslim, 51, will become president of Indonesia's second- most valuable company, after Setiadharma becomes chairman effective today, Setiadharma told shareholders in Jakarta at the company's annual meeting.

Ruslim will take over a company whose sales growth is expected to slow after surging 41 percent last year. Encouraged by the lowest interest rates in six years, Indonesians borrowed to buy cars last year, increasing Astra's profit by 22 percent. The central bank has said it may raise rates, increasing borrowing costs.

"The challenge for him is how to continue (Astra's) strong earning growth considering that most people are expecting slower growth," said Liny Halim, an analyst at Macquarie Securities in Jakarta, who rates the shares "outperform".

The company also said it will pay a final dividend of Rp 270 a share. In November, Astra paid an interim dividend of Rp 100 a share.

Astra, which was set up in 1957 as an agricultural trading company, expects sales growth to slow to 20 percent this year from 41 percent in 2004, Setiadharma said earlier this month. The company expects profit to rise 15 percent this year, slower than the 22 percent increase in 2004 when it had one-time gains from selling investments, he said.

" My priority will be to maintain Astra's International's market share," Ruslim said at a briefing. "We will add more outlets and increase Astra's after sales service."

Ruslim, who earned a master's degree in engineering at the University of Wisconsin, joined Astra in 1983 from Citibank NA, where he headed the merchant banking division.

The Jakarta-based company, which is 49.7 percent controlled by Singapore-based Jardine Cycle & Carriage Ltd., is the sole Indonesian importer and assembler for Honda Motor Co., Daihatsu Motor Co. and Isuzu Motors Ltd. The company is also paying more to import vehicle kits from abroad and has higher transportation costs. The rupiah has declined 2.2 percent against the U.S. dollar this year.

Industry sales in Indonesia rose 29 percent in April from a year earlier, Astra said, citing figures from the Indonesian Automotive Industries, or Gaikindo. Astra and rivals sold 51,248 units in April compared with 39,813 units a year before.

bMotorcycle sales in Southeast Asia's biggest economy rose 31 percent in April from a year earlier to 407,744 units, Astra said citing figures from the Indonesian Motorcycle Industry Association.

"With low per capita ownership, one two-wheeler for 12 people, and driven by aggressive lending" from financial institutions, market demand for two-wheelers remains strong, Ferry Yosia Hartoyo, head of research at DBS Vickers Securities in Jakarta said in a note to investors.

Astra International owns companies such as PT Astra Agro Lestari, Indonesia's biggest publicly traded agriculture company, PT United Tractors, a heavy equipment maker, and PT Astra Graphia a computer services company. Astra International also controls PT Bank Permata along with U.K.'s Standard Chartered Plc.

Maruli Gultom, president of Astra Agro was named a director on Astra International's board along with Tossin Himawan, vice president of PT Astra Honda Motor, and Johnny Darmawan, president of PT Toyota Astra Motor.