Modern Photo to set up a joint venture

Modern Photo to set up a joint venture

JAKARTA (JP): The publicly listed PT Modernphoto through its
subsidiary PT Honoris Industry plans to set up a joint venture
firm with two Japanese firms, Mitsui & Co., Ltd of Japan and PT
Mitsui Export Indonesia to produce electronic entertainment
products.

Finance Director Achmad F. Hasan said here yesterday the joint
venture, PT Honoris Mitsui Electronic would have a paid-up
capital of about US$70 million.

He said Modernphoto, a member of the widely diversified Modern
Group, would have a 70 percent stake and the two partners would
own the remaining 30 percent.

"The joint venture is still subject to government approval,"
he said.

The government's go ahead was expected in August this year, he
said.

The Modern group's vice president Michael Haribowo said the
new venture would handle all Honoris Industry's production
activities.

Honoris Industry at present produces car stereos under
license from its principal in Japan.

"One of the products is a car stereo with the Pioneer
brandname," he said.

With the joint venture licenses to produce the car stereos
would not be needed from the principle, Hasan said.

He said all the products would be exported.

"Hopefully the joint venture will contribute 20 percent to
Modernphoto's sales this year," he said after the company's
shareholders meeting.

Hasan said Modernphoto recorded total net sales of Rp 666.2
billion (US$277.5 million) in 1996, up 3.7 percent from 1995's
net sales of Rp 642.3 billion.

"Such a small sales growth was caused by a drop in the value
of camera exports in rupiah," he said.

He said the company's net profit rose to Rp 63.5 billion, up 2
percent from 1995's profit of Rp 62 billion.

But net profit this year was expected to increase by 16
percent to about Rp 74 billion, he said.

"The projection was revised from an initial estimate of 71
billion. Net sales were projected to grow by about 18 percent in
1997," he said.

During the first quarter this year, the company booked net
sales of Rp 177 billion, up from Rp 152 billion in the same
period last year, he said.

The net profit in the January to March period was Rp 16.8
billion, up from Rp 14.6 billion in the same time last year.

He said shareholders at the meeting endorsed the management's
proposal to cut the company's share par value from Rp 1000 to Rp
500.

The cut would double the number of shares and halve their
price, he said.

"The split is to increase the liquidity of the shares in the
market," he said. The number of shares would double to
266,769,900.

The property arm of the Modern Group, PT Modernland recorded a
net profit of Rp 14.16 billion in 1996, down from Rp 23.04
billion in 1995.

Jusuf Halim, the property company's director said Rp 3.5
billion of the 1996 profit would be used to pay dividends, the
other 2.5 billion as reserve funds and the remaining 8.12 billion
to increase the firm's working capital. (09)