Budi Acid to set up joint venture

Budi Acid to set up joint venture

JAKARTA (JP): PT Budi Acid Jaya of the Sungai Budi Group, a
major tapioca producer, said over the weekend that it has
received shareholders' approval to set up a joint venture with Ve
Wong Corporation of Taiwan.

Budi Acid said in a statement that it will acquire a 51
percent stake in the join-venture company, which will produce
monosodium glutamate (MSG).

"This US$20 million joint venture will commence commercial
production in the second half of 1997 with an expected monthly
production capacity of 1,500 tons.

It reported that under a joint venture agreement already
signed by the two parties, Ve Wong will purchase at least 1,000
tons of MSG per month for international distribution and the
remaining 500 tons will be sold domestically by Budi Acid.

The statement also said that Budi Acid will pay cash dividends
of Rp 50 (2.1 U.S. cents) per share, totaling Rp 5 billion, and
will issue one for one bonus shares.

Therefore, total dividends for the whole of last year will
amount to Rp 15 billion or 50 percent of the company's net
profits because the company also paid interim dividends of Rp 100
per share in October last year.

Budi Acid recorded a 201 percent increase in its net profits
to Rp 30.2 billion last year.

Its net sales rose from Rp 73 billion in 1994 to Rp 148
billion last year, 21 percent higher than expected, due mainly to
a significant increase in production following the acquisition of
six tapioca factories owned by the Sungai Budi Group in November,
as well as increases in tapioca prices.

The company's production capacity increased from 225,000 tons
to 510,000 tons per annum after the acquisition.

Tapioca sales accounted for 75 percent of the company's total
sales revenues in 1995, while the remaining 25 percent derived
from sales of citric acid and sulfuric acid.

The company expects to double its net profits this year to Rp
62 billion, supported by a full year consolidation of tapioca
sales from all of its factories, which will increase its total
sales by 70 percent. (alo)