Indosteel refocuses on electronics

JAKARTA (JP): Publicly listed PT Indosteel of the Texmaco Group announced on Friday its plan to acquire affiliated company Texmaco Micro Indo Utama to refocus on the electronics industry.

Announcing the plan at a public expose at the Jakarta Stock Exchange, Texmaco Group corporate secretary Tunaryo said the acquisition required Indosteel to issue right shares worth Rp 30 billion.

He said the acquisition, expected to be finalized toward the end of the year, was pending approval from shareholders and the Capital Market Supervisory Agency (Bapepam).

Indosteel was formerly PT Jeewon Jaya, which manufactured car stereos, satellite receivers and tuners. Micro Indo Utama assembles printed circuit boards (PCB), computers, servers and monitors and supplies local dealers of major brand names such as Aiwa, TVM, Samsung, SAPE and Sanyo.

Indosteel took its new name in early 1997 when it ventured into the steel business. The financial crisis which struck later that year undermined the plan and the company was bought by the Texmaco Group.

The company considered switching to the textile business and planned to buy a garment export company in Purwakarta, West Java, last year.

The plan was canceled after Indosteel's management and shareholders concluded the electronics business was more profitable, Tunaryo said.

"We will not leave the garment business completely, but we will concentrate more on electronics," he said.

Indosteel turned around a Rp 9.4 billion net loss in 1998 to a Rp 317 million net profit last year, based on sales of Rp 4.4 billion ($590,000) of electronic products from the days of Jeewon. The company attributed the turnaround to the stronger rupiah.

The company stopped producing electronics in 1999.

Director Darmalingga said Indosteel was optimistic sales would reach $25 million in three years with the acquisition of Micro Indo Utama.

Pipeline Trust Company Ltd holds 40 percent of the company's shares, with the remainder belonging to the public. (10)