IKI Kabel to counter slump by boosting exports to Japan

JAKARTA (JP): Publicly listed cable producer PT IKI Indah Kabel Indonesia plans to boost its exports to Japan to offset a domestic market decline in demand.

Company president Kusuo Sanjo said on Wednesday that local market demand had dropped sharply mainly due to a stop in orders from state-telecommunications firm PT Telkom.

"We do not expect many sales in domestic market this year," he said.

Sanjo said it was not likely that PT Telkom, which contributed Rp 34.4 billion to the company's net sales last year, would make any significant orders through next year.

"PT Telkom has made no telecommunication cable orders to our company this year," he said.

State electricity company PLN, however, is expected to make orders worth Rp 30 billion to the company this year, up from last year's Rp 24 billion, he said.

PT Telkom and PLN are the company's two main domestic consumers.

To offset the decline in the domestic market, the company plans to increase its export sales to Japan by 20 percent this year.

Exports will account for about 50 percent of the company's net sales this year and will increase to 70 percent by 1999, he said.

Japan currently absorbs 29.1 percent of the company's exports, while the Philippines accounts for 33.1 percent, Singapore 16.9 percent, Thailand 3.2 percent and others for 17.6 percent.

The company has projected Rp 226.6 billion in total net sales this year, down from Rp 235.2 billion last year.

It hopes to book a total net profit of Rp 900 million this year, compared to a net loss of Rp 35.9 billion last year.

Sanjo said that Japan's largest cable producer, Sumitomo Electric Industries Ltd., had increased its equity in IKI Kabel to 88 percent from 44 percent.

The company's other major shareholders include Japan's Sumitomo Corp. (5 percent), Indonesian businesswoman Fantini Loekito (2.02 percent) and the Salim Group through PT Perdanamulia Ekasakti (1.18 percent).

IKI Kabel is listed both on the Jakarta Stock Exchange and the Surabaya Stock Exchange with only 3.7 percent of its shares held by public shareholders.

The company's shares remained unchanged at Rp 425 on Wednesday with 42,000 shares changing hands. (aly)