Polysindo posts 47% revenue rise

JAKARTA (JP): The publicly-listed PT Polysindo Eka Perkasa, whose purified terephthalic acid (PTA) and polymer manufacturing plants will be inaugurated by President Soeharto today, reported yesterday a 47 percent increase in operating revenue to Rp 1,422.7 billion (US$607 million) in 1996.

Polysindo, the country's largest polyester producer, said the PTA and polymer facilities in Krawang, West Java were the centerpiece of a $645 million expansion program.

"These new facilities transform Polysindo into a fully- integrated polyester producer," said Marimutu Sinivasan, the company's president.

The PTA plant was designed to have an annual capacity of 360,000 tons a year. This will be absorbed entirely by the company's polymer units.

"Vertical integration has been the cornerstone of our expansion strategy," Sinivasan said.

Vertical integration means growth that ensures us self- sufficiency in the primary raw materials for our business and allows us to add value and capture margins at each part of the production chain, he added.

He attributed the revenue high growth to the expansion program.

Polysindo, a member of the Texmaco Group, manufactures polymer, polyester chips, staple fiber, filament yarn, finished fabric and PTA.

Its polymer plant, designed with an annual capacity of 330,400 tons, feeds the polyester staple fiber unit which has an annual capacity of 180,000 tons.

"Our audited financial report for 1996 shows that our operating income rose 55 percent to Rp 386 billion," he said.

However, its net earnings for 1996 declined to Rp 169.8 billion from Rp 211 billion in 1995.

"Our net earnings for 1995 was unusually high due to an extraordinary gain from the sale of a subsidiary," Sinivasan noted.

Fabric sales, which increased 69 percent, were the primary revenue driver behind the company's growth.

Sinivasan said plant expansions currently under construction would increase Polysindo's fabric production capacity from 160 million yards in 1996 to 228 million yards in 1997.

Polysindo's General Manager for Finance R. Gururajan said the company's income balance sheet was just beginning to reflect the upside of the expansion program.

"It should be noted, though, that this expansion has already been funded and it is now a matter of quarter over quarter earnings growth as capacities continue to come on stream in 1997," Gururajan said of the earnings growth prospect.

In a related development, the 1997 Hot Stocks 500 List of the Hong Kong-based Asiaweek magazine puts Polysindo at 19th place, up from 358th last year.

The magazine's annual hot stocks list ranks the shares of listed companies in Asia with a minimum market capitalization of $750 million by annual average growth in earnings per share over three years, including projections for the base year of the list.

Meanwhile, another member of the Texmaco Group, PT Texmaco Jaya, reported yesterday a 20 percent increase in net earnings to Rp 50.15 billion last year.

Texmaco Jaya, a producer of fashion fabrics in Krawang and Central Java, which is 80 percent owned by Polysindo, increased its net sales to Rp 482.2 billion from Rp 352.7 billion in 1995.

Texmaco is expanding its annual weaving capacity from 54 million to 87.3 million yards and finishing capacity from 97.2 million to 205.2 million yards.

These expansion programs should be completed in the second half, the company said. (vin)