The credit squeeze will reduce heavy equipment sales by 40 percent next year, a business player says.
The sales of heavy equipment will decrease to around 6,000 units in 2009 from 10,000 units this year, Gidion Hasan, director of finance at the heavy equipment company PT United Tractors told reporters Tuesday.
"Lower sales will be triggered by financing difficulties due to the current global crisis," Gidion said.
"We predict our profits will drop by 10 percent in 2009," Gidion said, adding that heavy equipment sales contributed 40 percent to the total company's revenue.
United Tractors, a unit of PT Astra International -- Indonesia's biggest publicly traded company, booked Rp 21.10 trillion in net profits in the third quarter of 2008, up by 59 percent compared to the same period last year.
As of September this year, United Tractors has sold 3,823 units of Komatsu earthmoving equipment. Komatsu's sales makes up a 45 percent share of Indonesia's heavy equipment market.
"We have to boost our market share next year to anticipate lower demand," United Tractors president director Djoko Pranoto said.
Gidion said the fall in profits next year would not be proportionate to the anticipated decline in the company's heavy equipment volume of sales because growth in another line of business, that of mining contracting, would grow significantly next year.
He added the company expected its mining contracting volume of sales would increase by between 10 and 15 percent in 2009. "Despite the crisis, mining contracting will keep growing because the coal price is still at a favorable level," Gidion said.
PT Pama Persada, United Tractors's subsidiary focusing on mining contracting, produced 44.2 million tons coal as of the third quarter of 2008, up by 12 percent from 39.3 million tons in the same period last year.
Gideon said United Tractors would invest at least US$315 million in 2009 to increase Pama's coal mining capacity. --
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