Great River to boost export to help cover forex losses

JAKARTA (JP): Publicly listed apparel producer PT Great River International plans to double its exports this year to help cover its huge foreign exchange losses.

"We will increase this year's exports by 100 percent from 1998," Great River president Sunjoto Tanudjaja said on Tuesday after the company's annual and extraordinary shareholders meeting.

He also said there had been some indication that domestic buying power was recovering and thus hoped the company's domestic sales would help offset the company's losses caused by the economic crisis.

Great River recorded Rp 635 billion (about US$93.4 million) in foreign exchange losses at end of 1998. About Rp 65 billion of the total was recorded in the 1998 financial year, while the remaining Rp 570 billion is amortized over the next few years.

Great River booked a Rp 89.8 billion net loss at end of 1998, compared to Rp 12.5 billion the previous year.

The shareholders meeting endorsed the company's proposal not to pay out dividends for 1998 because of the negative income.

It also plans to sell part of its stake in Japanese joint ventures PT Gunze Indonesia and PT Gunze Socks Indonesia for $3.78 million, with the option to buy back the shares in three and a half years.

"The proceeds from the divestment will be used to strengthen the operating cash flow of the company's core business," Sunjoto said.

He said that to support the increase in exports the company was set to recruit an additional 3,000 workers by the end of 1999 on top of its existing 11,000 workforce.

Great River is in the process of talks for its restructuring, with ABN Amro Merchant bank and KPMG as financial advisors.

The restructuring deal for some Rp 1.2 trillion in loans (as of the end of 1998) is slated to be completed in the second semester of this year, the company said.

Ninety-eight percent of the loans is in U.S. dollars. (udi)