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)