Indorama posts $51.5m net profit

JAKARTA (JP): Publicly listed polyester producer PT Indorama Synthetics recorded an unaudited net profit of Rp 122 billion (US$51.5 million) in 1996, up from Rp 120.32 billion in 1995.

The company booked sales turnovers of about Rp 678 billion in 1996, up from 1995's Rp 675.9 billion in sales, Indorama's Managing Director and Vice President Sri Prakash Lohia said yesterday.

"Indorama's export volume also increased 24 percent in 1996 to 88,000 tons from 71,000 tons," Lohia told newsmen after the company's annual public expose.

The European market made up 57 percent of total exports with Asia and the Middle East taking 30 percent, Australia 4 percent and others 9 percent.

He said the company had anticipated the global downward trend in the polyester industry.

According to a research conducted by Merryl Linch and Asia Equity recently, polyester producers in China, Taiwan, Thailand and South Korea experienced a drop in net profit because of the steep fall in capacity utilization and the cancellation of plant expansions.

The research showed the net profit of Yizeng Chemical Fiber in China dropped 75 percent from 1.2 billion Rmb in 1995 to 0.3 billion of Rmb in 1996. Taiwan's Far Eastern Textile's profit dropped 48 percent to 1.3 billion New Taiwan dollars in 1996 from 2.7 billion of New Taiwan dollars in 1995, Tuntex in Thailand and Sam Yang in South Korea also lost profit in 1996.

"Indorama, however, recorded a remarkable performance while other polyester producers lost," Lohia said.

He said the company expected total sales of Rp 934 billion in 1997 and net profits of Rp 148 billion.

PT Indorama Synthetics, which was awarded with Best managed company in Indonesia for operation management by the Asian Institute of Management in 1996 and Best in Investor relations and treatment by Asia Money, produces polyester filament yarns, polyester staple fiber, PET resin, seven blended yarns and polyester fabrics.

Lohia added his company planned to invest about US$350 million (Rp 829.5 billion) between 1997 and 1999 on expansion projects.

He said that about US$135 million would be used to expand the company's polyester and spun yarn plants in Purwakarta, West Java.

He said the company would increase polyester production by 36,000 tons from 149,000 tons.

Indorama's Senior Financial Manager V.S. Baldwa said between 1998 and 1999 the company would invest another US$265 million expanding of its polyester and power plants in Purwakarta.

He said the power plant would support the polyester plant.

"The company expects to finance most of the additional investment with its own resources," Baldwa added.

The company's share price on Jakarta Stock Exchange gained Rp 125 to close at Rp 2,125. (09)