Komatsu to operate new factory next year

JAKARTA (JP): PT Komatsu Indonesia, a manufacturer of heavy construction equipment listed on the Jakarta Stock Exchange (JSX), said that it will operate a new factory in Bekasi, east of here, early next year.

"The operation of the new factory will allow us a total annual production capacity of 2,400 units of heavy equipment next year," Komatsu's vice president, Budiardjo S., said in a press conference here yesterday

Budiardjo said that the construction of the new factory, which is expected to be completed in November, needs an investment of US$30 million. He declined to explain how the project would be financed.

Data from the JSX, however, shows that the company allocated 26 percent of the Rp 67 billion ($28.6 million) fund collected from its initial public offering last October to finance the establishment of the new factory.

The company, which currently has a production capacity of 1,800 units of heavy equipment, gradually increased its production from 1,200 units in 1994 to 1,560 last year.

"We also expect to produce up to 1,800 units this year," Budiardjo said.

He also said that Komatsu booked Rp 379 billion in net sales and Rp 31 billion in net profits last year, as compared to Rp 275 billion and Rp 17 billion respectively in 1994.

"The 37 percent sales increase was mainly due to the 51 percent rise in sales of hydraulic excavators, from only 468 units in 1994 to 708 units last year," he said.

He said that in the last two years, the company grabbed a 41 percent share in the domestic heavy equipment market.

The demand for heavy equipment in the country, according to Budihadjo, has grown by an average of 24 percent per annum since 1992.

Total demand for heavy equipment in the domestic market increased to 4,290 units last year from 3,438 units in 1994.

"This year, we expect to book Rp 540 billion in net sales, with the support of the increasing demand for heavy equipment in the construction, plantation, mining and timber estate sectors," Budiardjo said.

He cited official data indicating that there will be 23,800 kilometers of new roads, including 770 kilometers of toll roads, under construction between now and the year 2005.

The data also indicates that in the next five years, there will be 2.8 million hectares of timber estates undergoing development. Moreover, the production of coal is expected to reach 64 million tons per annum by the year 2000, as compared to only 28 million tons in 1994.

Budiardjo said that construction machinery accounts for 50 percent of the company's total heavy equipment, followed by machinery for timber estates (25 percent) and machinery for mining and plantations (25 percent).

Heavy equipment produced by Komatsu Indonesia includes bulldozers, hydraulic excavators, wheelloaders and motorgraders.

The company also produces machinery components and operates a foundry which respectively contributed 5 percent and 7 percent to its total sales last year. (08)