Multi Bintang will build new brewery

Multi Bintang will build new brewery

JAKARTA (JP): PT Multi Bintang Indonesia, one of the major
brewers in Indonesia, plans to set up a new brewery in East Java
next year in a bid to further strengthen its market footholds in
the country.

Rene Hooft Graafland, the company's president, said on Tuesday
that the planned brewery, which will cost Multi Bintang about
US$820 million, will be one of the most technically advanced
Heineken operations in the Asia Pacific region.

"The new brewery will replace the existing one in the
province," he told The Jakarta Post following the company's
annual shareholders meeting.

Multi Bintang, 75 percent owned by Heineken Internationaal
Beheer BV of the Netherlands, 7.4 percent by another Dutch
company and about 16.7 percent by the Indonesian public, operates
two breweries, one in Tangerang, West Java and one in Surabaya.

Graafland said the replacement of the Surabaya brewery is part
of a program to improve its competitive edge in the country's
beer market, which last year booked a modest growth of 20
percent.

He estimated that the growth in the beer market will be flat
this year.

The government's decision to raise the beer excise, by
approximately 30 percent in December last year, will negatively
affect the beer market because producers have to raise prices to
offset the rise in the excise, he said.

Levies

"Attempts by private enterprises to collect additional levies
on beer is also creating uncertainty for the beer market," he
said of Arbamass Multi Invesco's alcoholic beverage labeling.

The politically well connected Arbamass claimed that it had
received a license from the government to control the liquor
trade in Indonesia, through the sale of stickers to producers.

Graffland said the move to sell the stickers, worth Rp 600 for
a bottle of beer, lacked legal basis and that his company would
continue opposing it, even though the company has, currently, not
been affected.

Tuesday's annual shareholders meeting approved the 1994
financial reports and the company's proposal to pay a cash
dividend of Rp 820 (3.7 US cents) per share, of which Rp 185 was
paid as an interim dividend in Oct. 3, last year.

Graffland said that the dividend for the 1994 book year, ended
on Dec. 31, was within the same level of those distributed last
year, despite a significant growth in the company's net profits.

"We have to set aside a significant amount of funds for the
construction of the new plant in Surabaya," he said.

Multi Bintang's sales rose by 22 percent to Rp 272.93 billion
last year, from Rp 224.39 billion, while the net income increased
by about 29 percent to Rp 36.04 billion, from Rp 27.99 billion in
the same period. (hen)