Indosteel refocuses on electronics

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)