KIA to float shares on local stock marts

JAKARTA (JP): PT Keramik Indonesia Assosiasi (KIA), a major ceramic tile producer in the country, will sell around 30 percent of its 85 million shares to the public next month to finance its expansion program, the company's president says.

Irjanto Ongko said Tuesday that KIA, which operates two ceramic plants, one in Belitung of South Sumatra and the other in Bogor of West Java, will expand the capacity of its wall tile production to six million square meters per annum from only 2.6 million square meters at present.

"About 70 percent of the public offering proceeds will be used to finance the expansion program," he told securities analysts during the presentation of the company.

KIA is one of at least five companies to float their shares on the domestic stock exchanges next month. KIA's public offering is lead-underwritten by PT Makindo Securities.

Irjanto said KIA will put priority on the production of wall tiles in the future so as to tap the growing demand from overseas markets.

The company exports around 67 percent of its wall tiles at present while other products such as floor tiles, roof tiles and sanitary ware are still mostly sold on the domestic market.

He said that around 18 percent of the fresh funds to be generated from the public offering would be used to reduce the company's bank borrowings and the remaining 12 percent for strengthening its capital structure.

Gunawan Yusuf, a director of the underwriting company, said that the price of the shares have yet to be fixed but sources said that it would be around Rp 3,000 each.

KIA, which is at present 95.67 percent owned by PT Ongko Multicorpora and the remaining 4.33 percent by Kaharuddin Ongko, recorded net sales of around Rp 62 billion (US$29.5 million) in the Jan-July period, far above its sales of Rp 43.5 billion during the whole of 1993.

The company's net profit during the seven months of this year reached Rp 6.5 billion, as compared to Rp 2.4 billion for the whole of 1993.

Gunawan said that the sharp increase in the sales was partly due to the consolidation of the two-month sales of one of its subsidiaries in its financial reports.(hen)