Eratex's profit declines

JAKARTA (JP): PT Eratex Djaja Limited, a publicly listed clothing and textile company, last year made a profit of Rp 1.9 billion (US$778,050), far lower than 1995's profit of Rp 3.1 billion, an executive said yesterday.

Eratex' president Julian W. Wong said here that the 37.5 percent decline was caused by substantial increases in cotton prices and labor costs.

He said that in 1996, the company's wages bill increased 26 percent.

Wong said the company's profit would increase 25 percent this year because cotton prices might go down while labor costs would not increase at last year's rate.

The company's sales revenue increased 27.3 percent to Rp 130.8 billion in 1996, from Rp 102.7 billion in 1995, he said.

Wong said Eratex would set up a new factory under joint venture arrangement with Freshtex of Germany in 1998 to raise its production capacity 30 percent from 400,000 items a month at present.

Yesterday's meeting approved the management's proposal to distribute a Rp 982.36 million dividend. (13)