Thu, 06 Oct 2011

From: The Jakarta Globe

By From: The Jakarta Globe
By:Faisal Maliki Baskoro

Astra International, the largest automotive retailer in Indonesia, plans to spend $1.5 billion next year on expansion, including an aggressive push into infrastructure, a company executive said on Wednesday.

Gunawan Geniusahardja, a director of Astra, said about 40 percent of the spending would be used for infrastructure projects.

“We are expanding into our core business, the business that we are good at, which includes infrastructure,’’ Gunawan said on the sidelines of the Investor Summit in Jakarta.

Gunawan said Astra hoped to build coal-fired power plants in East Kalimantan and two toll road projects - one linking Kunciran and Serpong in the Tangerang area of Banten province, and another in East Java. He did not provide any details.

Aside from the construction projects, Gunawan said 60 percent of the funds would be used to finance Astra’s automotive division, including a plan to boost production capacity at the Toyota and Daihatsu automobile plants in Karawang, West Java.

Gunawan said Astra wanted to balance the contributions from its various business units so no single unit was a dominating factor in generating revenue.

The company will attempt to diversify with its infrastructure projects, and it hopes to benefit from the government’s plan to boost the economy by building roads and seaports.

“We are trying to find a balance,” Gunawan said. “The contribution of the automotive business has been reduced. It is now 60 percent, from about 80 [percent] in the past.”

Astra has six business divisions: automotive, financial services, heavy equipment distribution, agribusiness, information technology, and infrastructure and logistics.

It controls Astra Agro Lestari, the country’s biggest listed palm oil producer. Astra also controls United Tractors, the heavy equipment distributor.

Astra aims to maintain its position as the market leader in the automotive business.

“ For car sales, we remain the market leader with a market share of 55 percent,’’ Gunawan said.

The company also aims to maintain its market shares in the motorcycle business, he added.

“Motorcyle sales at Astra International are forecast to reach 4.3 million units next year, or equivalent to around 56 percent of the national market of 8.3 million,’’ he said.

Shares of Astra International fell 2.4 percent to Rp 57, 300 on the Indonesia Stock Exchange on Wednesday.

The shares have rise