Gajah Tunggal projects 20 percent growth in 2004

Leony Aurora, The Jakarta Post, Jakarta

Publicly listed tire maker PT Gajah Tunggal is projecting a 15 percent to 20 percent growth in sales in 2004, said Mulyati Gozali, the company's new president commissioner, on Friday after a shareholders' meeting, the first in five years.

Mulyati, as quoted by Detik.com, said the audited 2003 sales were also estimated to have increased by 15 percent to 20 percent from 2002.

The company's latest report shows that in the first nine months of 2003, its sales declined by 4.7 percent to Rp 4.35 trillion (US$511 million) from Rp 4.56 trillion in the same period the previous year.

In 2002, the company's audited sales reached Rp 5.56 trillion, a decline from 2001's Rp 5.74 trillion in sales.

Mulyati did not specify the company's profit target for 2004 or its estimated profit for 2003.

Last year's balance is being audited and will be announced in June, she said.

According to its latest financial report, Gajah Tunggal had a net income of Rp 1.07 trillion in the January-September period of 2003, a 61.82 percent drop from Rp 2.81 trillion in the same period in 2002.

The company booked an audited Rp 3.8 trillion net profit in 2002, a jump from the loss of Rp 1.234 trillion it suffered in 2001.

It has not been decided whether the 2003 profits will be distributed as dividends, said Mulyati, adding that a decision would be made at a shareholders' meeting in June.

It was decided during the shareholders meeting on Friday, which was held to review and legalize the company's balances from the fiscal years 1999 to 2002, not to distribute the profits from 2002 as dividends, considering the immense debts of the company.

Including the debts of its subsidiaries, the company's total debts as of 2003 amounted to $550 million, which had been restructured and can be paid off over the next six years, Mulyati said.

Gajah Tunggal is the largest tire maker in Southeast Asia. It was founded by business tycoon Sjamsul Nursalim, who handed the company over to the Indonesia Banking Restructuring Agency (IBRA) as collateral for the Rp 40 trillion liquidity assistance injected into his now-defunct Bank Dagang Negara Indonesia (BDNI).

In addition to the tire company and the bank, Sjamsul also had to surrender PT Gajah Tunggal Petrochem Industries and shrimp farm PT Dipasena Citra Darmaja to IBRA.

The government raised Rp 11.5 trillion from the sale of BDNI's assets and has received some Rp 572 billion in cash from Sjamsul. The rest of the liquidity assistance was to be recovered from the sale of the other companies.

In April 2001, Sjamsul was declared a suspect in a corruption case involving liquidity funds and fled to Singapore, claiming he required medical treatment. He remains in Singapore.

In a bid to recover the rest of the liquidity funds, IBRA agreed late last year to sell its 78 percent stake in Gajah Tunggal and 20 percent of Petrochem to Garibaldi Venture Fund, a Singaporean company whose owners are unknown, for Rp 1.83 trillion.

The move caused Gajah Tunggal's shares to plunge by Rp 125 to Rp 575, its largest decline in three years. Share prices have recovered and now stand at Rp 600.