Dynaplast buys plastic packaging company

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)