Jabarwood gets $24m syndicated loan facility
JAKARTA (JP): PT Jabar Utama Wood Industry (Jabarwood) signed a US$24 million syndicated loan facility yesterday which will be used to restructure the company's existing debts and provide working capital for expanding production.
The loan agreement was arranged by the American Express Bank and the Agricultural Bank of China as co-lead managers. Other syndicate members were Korea Leasing, Multicor, Maybank Nusa and Bank Danamon.
According to a statement made available to The Jakarta Post, the loan will be provided in two stages. Yesterday's agreement provide for a $14 million, one-year revolving working capital loan facility and a $10 million, five-year investment loan facility.
Apart from dissolving some of the company's high-interest debts and opening up export markets for Jabarwood's new heat- resistant flooring products, the loan will also provide funds for the purchase of the equipment and technology needed to consolidate the new heat-resistant flooring production lines.
Jabarwood, a downstream plywood processor and a member of the Barito Pacific Group, recently set up a manufacturing facility for heat-resistant floor panels, which are widely used in countries where underfloor heating systems impose a significant stress on floorboards.
The statement said Jabarwood had been developing the manufacturing process for some time and was now ready to move into commercial production.
Jabarwood Director Alex Nugroho said in the statement that he expected sales of the company's "fancy flooring" products to surge from the present sales volume of 40,000 cubic meters a year.
Jabarwood, which was incorporated into the Barito Pacific Group in 1989, currently has an annual turnover of $50 million, or about 450 percent higher than its 1989 levels.
The company currently manufactures laminated plywood, fancy plywood and fancy flooring, which are exported to Japan, Taiwan, Korea, Hong Kong, the Middle East and the United States.
According to Nugroho, Korea is currently the prime target market of the new product, but the company is also eying Japan, where an estimated $200 million worth of heat-resistant flooring is sold each year. (pwn)