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)