Indofood plans more exports

Indofood plans more exports

JAKARTA (JP): The world's largest instant noodle producer, PT
Indofood Sukses Makmur, will expand its overseas market to obtain
more foreign exchange to repay its huge foreign debts.

The company's second vice president, Eva Riyanti Hutapea, said
yesterday Indofood expected to raise about US$300 million this
year from exports.

She said the export of instant noodles was expected to
contribute about $11 million to this year's export target,
coconut oil $120 million, palm oil $140 million and miscellaneous
products accounting for the remaining $29 million.

"We have to boost the exports to generate more dollars to
finance part of our debts," she said after a shareholders
meeting.

The company's chief commissioner Soedono Salim, a longtime
ally of former president Soeharto and his son Anthony Salim, the
company's first vice president, were not present at the meeting.

Eva said Soedono, alias Lim Sioe Liong, was still in the
United States undergoing eye treatment while Anthony had another
important meeting.

Indofood's foreign debts reached US$1 billion as of this
month, she said.

She said she was optimistic that the company would be able to
meet all its overseas obligations because about $393 million of
the total foreign debt had been hedged at Rp 4,500.

Contract

The company also had a forward contract worth $353 million
which would be due by the end of this year and the middle of next
year, she said.

"But, on top of that we still have cash on hand worth $100
million."

Of the company's total funds, she said about 60 percent was
deposited in the country's largest bank, Bank Central Asia (BCA),
a financial arm of the Salim group which was put under the
supervision of Indonesian Bank Restructuring Agency (IBRA) early
last month.

The remainder is deposited in other local commercial banks.

Eva said BCA's recent troubles had not affected the operations
of Indofood.

She declined to mention the company's projected sales and net
profit this year.

The company booked a 70 percent decline in net profit to Rp
28.29 billion ($2.57 million) in the first quarter this year from
Rp 97.36 billion over the same period last year, even though the
company's sales increased by 127 percent to Rp 1.76 trillion from
Rp 778.20 billion in the same period.

Eva also said the company might raise the retail price of
instant noodles to Rp 600 per packet in the coming months to cope
with the rising production cost.

She said Indofood had heavily subsidized sales of the noodles
in the domestic market since April due to the sharp increase in
the production cost.

It costs Rp 369 to produce a packet of instant noodles while
its sales price is Rp 320.

Indofood, which produces 13 billion packets of instant noodles
per year, has divisions on noodles, edible oil and fats, flour
business and snacks, baby foods, distribution, trading and others
businesses.

Eva said the company -- which suffered total losses of Rp 45
billion due to massive riots and looting in May -- is currently
10.18 percent owned by the government, 17.49 percent by PT Mekar
Perkasa, 5 percent by PT Citra Buana Dirgaputri, 6.09 percent by
Aquila Holding Ltd., 5.84 percent by Norbax Inv and other
shareholders account for the remaining 55.40 percent. (aly)