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)