Tue, 30 Aug 1994

Centex's profit falls by 82 percent

JAKARTA (JP): PT Century Textile Industry (Centex), a textile manufacturer listed on the Jakarta Stock Exchange, yesterday reported an 82 percent decline in its after-tax profit to Rp 2.6 billion (US$1.2 million) in the 1993-94 year to April.

Hadi Budiman, vice president of Centex, announced yesterday that the decrease resulted from unfavorable conditions on the world market.

He said 80 percent of Centex's production of 32 million yards of textiles were exported last year.

"The price declines on the world market have been caused mainly by the sales of cheaper products from China," Budiman said.

He said China, for example, exports fabrics at 50 U.S. cents per yard, far lower than the 70 cents charged by most Indonesian exporters for similar products.

In terms of textile exports, China looms as a serious competitor for Indonesia because it has raw materials at home, while Indonesia must import them.

Budiman noted that Centex's revenues decreased by one percent to Rp 49.1 billion in 1993-94 although the volume of its sales increased by 2.91 percent to 32 billion yards.

He acknowledged that the declines in Centex's revenues occurred especially during the January-April period in line with the performance of Indonesia's textile exports. The country's total textile exports increased by 8.7 percent in volume to 228,577 tons in the first four months of this year but declined by 25 percent in value to $1.6 billion.

However, textiles still constitute 14 percent of Indonesia's total exports.

Budiman said the decline in revenues was also caused by increased production costs due to higher wages and fuel prices.

He also noted that Centex has invested some Rp 8.5 billion in new machinery. (rid)