Hexindo Adiperkasa diversifies its business

Hexindo Adiperkasa diversifies its business

JAKARTA (JP): PT Hexindo Adiperkasa, a publicly listed heavy
machine distributor, announced yesterday that it was preparing to
become a builder and reconditioner of coal mines.

Hexindo's vice president, Husni Effendy, told journalists that
its diversification plans were approved by shareholders in an
extraordinary meeting yesterday.

"It doesn't mean that we will change our business. On the
contrary, we must diversify our business in efforts to strengthen
our position," Husni said.

He said the company expects to start the new businesses next
year. In the meantime, it is still looking for strategic partners
in coal mining.

Husni would not reveal details of the plans, such as names of
potential partners or where investment would originate.

He did confirm that Hexindo would not raise capital for the
businesses through the stock market.

"For the reconditioning business, we will get financial
support from our principal companies -- Hitachi Construction
Machinery Co. Ltd. and Itochu Corporation, both of Japan," he
said.

According to Husni, Hexindo boasts a 25 percent share of the
domestic heavy machine market, due mainly to sales of its Hitachi
hydraulic excavators.

He said hydraulic excavators currently accounted for about 60
percent of the domestic heavy machine market.

"We expect a 26 percent growth in sales this year and
hydraulic excavators to remain the major contributor to our
sales' revenue," he said. "With about 700 units to be sold, it
will account for 75 to 80 percent of our total sales."

Besides hydraulic excavators, Hexindo sells wheel loaders and
forklifts.

Domestic demand for heavy equipment is estimated to grow by 17
percent this year.

In the first quarter of 1996, Hexindo made net sales of Rp 52
billion (US$22 million), indicating a 68 percent increase over
the same period last year. Its net profit rose 85 percent to Rp
3.9 billion over the same period.

Husni said the company's net sales in 1995 reached Rp 200
billion compared to Rp 151 billion in 1994.

Net profit also increased from Rp 7.8 billion in 1994 to Rp 13
billion in 1995.

He said that Rp 3.3 billion, or 25 percent of net profit, has
been allocated for dividends for which shareholders will receive
Rp 80 per share. (alo)