Branta Mulia plans tire-cord plants abroad

JAKARTA (JP): PT Branta Mulia plans to set up nylon tire-cord manufacturing plants in India and China in cooperation with Du Pont de Nemours and Company as part of its expansion overseas, a company executive says.

Branta Mulia's president Ibrahim Risjad said yesterday the company had signed a memorandum of understanding with Du Pont to build the new plants in the two countries.

He did not say when they would start operating.

Company director Andry Pribadi said the facility in India, to be built with an investment of US$120 million, would have a production capacity of 20,000 tons of nylon tire cord a year.

Du Pont would be the majority shareholder in the India plant, he said after the company's annual shareholders' meeting.

Andry said plans for the China facility were still being discussed.

Ibrahim said Branta Mulia, which produces tire cord, booked a net profit of Rp 42.32 billion (US$17.34 million) last year, up 4 percent from Rp 40.71 billion the year before. Its assets were Rp 765.13 billion as of last December, up 13.13 percent from Rp 676.34 billion in the same period in 1995.

He said that Branta Mulia, which is listed on the Jakarta and Surabaya exchanges, had encouraging financial results last year despite an unfavorable climate in the industry's raw material sector.

Sales dropped 6.45 percent last year, from Rp 336.92 billion in 1995 to Rp 315.19 billion, partly due to a rise in raw material prices, he said.

"At the same time the company's operational costs increased 10.34 percent due to the establishment of a new joint venture, PT Branta Mulia Teijin Indonesia, whose production facilities are still under construction," he said.

The new plant is in Citeureup, West Java, adjacent to the company's original manufacturing plant.

Ibrahim said the plant, which was scheduled to start production in the third quarter this year, would produce 9,300 tons of polyester tire cord a year.

Branta Mulia has a 70 percent interest in Branta Mulia Teijin. The remaining 30 percent is owned by Japan's Teijin Limited.

Ibrahim said the company projected a 10 percent increase in net profit and sales this year.

"A decline in the demand for new automobiles in Indonesia last year effected tire sales, which resulted in lower domestic sales for our tire cord fabric," he said.

Also, overseas tire cord fabric producers had also sold their products to Indonesian tire manufacturers at prices "well below those prevailing on the world market", he said.

"But we don't expect the situation to continue in years to come," he said.

Ibrahim said yesterday's shareholders' meeting approved a stock split which reduced the nominal value of the company's stock from Rp 1,000 (40 U.S. cents) to Rp 500 a share.

The meeting also agreed to a dividend of Rp 36.45 billion, or Rp 162 a share for 1996.

Ibrahim said the company's Thailand plant -- Thai Branta Mulia -- which had started operating in 1993 had increased its production from 16,000 tons to 18,500 tons a year.

Thai Branta Mulia, which is a joint venture between Branta Mulia and Thai Textile Industries, contributed Rp 8.89 billion to Branta Mulia's profit last year.

Branta Mulia produces nylon and rayon tire cord fabric for Goodyear, Bridgestone/Firestone, Continental/General Tire, Dunlop/Sumitomo and Intirub, among others. (pwn)