Budi Acid Jaya's profits up 201%

Budi Acid Jaya's profits up 201%

JAKARTA (JP): PT Budi Acid Jaya, a major tapioca producer
listed on the Jakarta Stock Exchange (JSX), reported a 201
percent increase in its net profits to Rp 30.2 billion (US$12.9
million) last year.

The company doubled its net sales from Rp 73 billion in 1994
to Rp 148 billion last year, 21 percent higher than its
expectations.

Budi Acid's president, Santoso Winata, said yesterday that the
increases in sales and profits were due mainly to production
capacity expansion, particularly after the acquisition of six
tapioca factories owned by the Sungai Budi Group in November, as
well as an increase in tapioca prices.

"The acquisition allowed us to expand our production capacity
from 225,000 tons to 510,000 tons per annum," Santoso said.

He added that tapioca prices rose from an average of Rp 647
per kilogram in 1994 to Rp 750 last year.

Tapioca contributed 75 percent of the company's total sales
revenues in 1995, citric acid 20 percent and sulfuric acid 5
percent.

"We expect to double our profits this year to Rp 62 billion
supported by a full year consolidation of tapioca sales from all
of our factories, which will increase our total sales by 70
percent," Santoso said.

He noted that the demand for tapioca will increase this year
as a result of a massive capacity expansion of the paper
industry.

Santoso also explained that the company has set up two joint
venture factories with two different partners -- British Sugar
and Ve Wong Corporation of Taiwan -- to produce glucose and high
fructose, and monosodium glutamate (MSG).

The company took a 50.1 percent stake in the $18 million
glucose and high fructose plant and 51 percent stake in the $20
million MSG plant.

"We realized that the competition in the MSG industry is very
tight now. However, we decided to produce MSG because our
partner, Ve Wong, promised to market about two-thirds of the
total production," Santoso said.

The glucose and MSG plants have a total capacity of 50,000
tons and 18,000 tons per annum respectively. (08)