Dynaplast buys plastic packaging company

JAKARTA (JP): Shareholders of plastic crate and components manufacturer PT Dynaplast approved on Monday the management's proposal to acquire plastic bottle molder PT Sanpak Unggul for Rp 35.4 billion (US$5 million).

"The takeover is to expand our business while increasing the economy of scale," said Dynaplast president Ronny Hambali.

He said the acquisition would allow Dynaplast to expand its plastic bottles division from making containers only for cosmetic and lubricant oil companies to also cover companies in other industries, such as cleaning liquid and other household products.

"After the acquisition, it would expand to also supply to the acquired companies' customers which cover cleaning liquid and manufacturers' other household products," Ronny said.

The acquired company possessed a purchase order on a five-year term contract maturing in 2004 from giant consumer products manufacturer PT Unilever Indonesia, he added.

Ronny said the Rp 35.4 billion acquisition price was a good deal because the figure was four times the price earning ratio of year 2000.

He said Dynaplast projected a possible increase in sales from the Rp 190 billion as predicted for the current year to Rp 290 billion during next year as result of the acquisition and the continued improvement of the domestic business climate.

The increase among others was attributable to the projected Rp 54 billion sales contribution from the acquired company and the higher level of operating efficiency achieved through the acquisition, Ronny said.

Dynaplast's sales rose to Rp 87.1 billion in the first six months of the year, up 45 percent compared to the same period of 1998.

The company's consolidated net income in the first half of the year stood at Rp 14.5 billion, a 49 percent increase over the corresponding period last year.

The plastic crate and components manufacturer said it projected better future sales as demand for plastic materials increased since the second quarter of this year as a result of higher consumer demand triggered by rising people's purchasing power.

The company recently bought back 29.39 million of its shares with average value of Rp 990 per share.

A share buy-back is currently the best investment alternative for the shareholders, the management said. (udi)