Prasidha to increase pepper production

JAKARTA (JP): The publicly listed PT Prasidha Aneka Niaga yesterday signed a joint venture agreement here with Burns Philp of Australia to produce 8,000 tons of ground pepper per year.

"We'll respectively have a 50-percent stake in the joint venture," Prasidha Aneka's president, Mansjur Tandiono, told the press following the signing ceremony for the agreement.

He said that the joint venture, which has yet to be named, will have Rp 12 billion (US$5.2 million) in paid-up capital. It will establish a pepper processing plant in Lampung, southern Sumatra, which is a major pepper producing area.

"We'll start production early next year," he said.

Prasidha Aneka, which was listed on the Jakarta Stock Exchange in October 1994, has main businesses in the processing and trading of agricultural commodities including coffee, crumb rubber, tapioca chips and pellets, cocoa, pepper and vanilla.

Currently, Prasidha Aneka exports unprocessed pepper. Last year, its (unprocessed) pepper exports amounted to 4,965 tons, worth Rp 26 billion.

The trading company, which exports most of its agricultural products, saw its net profit drop by 9.3 percent to Rp 26.76 billion ($11.6 million) last year. But it decided to pay dividends of Rp 110 per share for its 1995 operation.

Through the joint venture, Prasidha Aneka targets to increase its pepper export value to between $20 million and $25 million next year, or 5 percent of its total sales.

Last week, the Prasidha Group signed a joint venture agreement with Itochu Corporation of Japan to increase crumb rubber production from a current 70,000 tons to 90,000 tons per year.

The company also plans to set up a coffee processing plant in China.

"Until now, Prasidha exports only unprocessed pepper. But through this joint venture, we'll process the agricultural commodity into ground pepper," John Cowling, Burns Philp's general manager for Asia Pacific Operations, said.

He noted that Burns Philp is a global food ingredients company using proprietary technology to help its customers in over 60 countries make better food products.

Cowling claimed that his company -- with an 8 percent market share on the world market -- is the second biggest producer of processed pepper after McCormick of the United States, which has a 15 percent market share.

"By choosing this Indonesian company as our partner, we expect to double our pepper production in 10 years. That means we'll be the biggest producer of processed pepper in the world," he said. (13)