PT Astra plans to help small firms

JAKARTA (JP): Giant car assembler PT Astra International has pledged to set aside 2 percent of its net profits each year to help finance small and medium enterprises (SMEs) across the country, a company executive said.

General Manager of Astra's Dharma Bhakti Foundation, Soepardi, said over the weekend that with a total annual net profit of Rp 470 billion (US$195.83 million), Astra was able to set aside some Rp 10 billion for SMEs each year.

He said that under the program, Astra focused its assistance on SMEs in the car repair business, starting from those in the regency to village levels.

Soepardi said the program was aimed at empowering SMEs and, in turn, marketing Astra's automotive products.

Soepardi said last year, 318 small and medium scale garages were assisted by Astra, of which 162 were selected to become official garages for Honda motorbikes.

Honda is among the foreign brands assembled by Astra, which is listed on the Jakarta Stock Exchange. Others include Toyota, BMW, Daihatsu and Isuzu.

"In the future, the selected garages are expected to provide maintenance services for Honda motorbikes only. In the beginning, however, they are allowed to accept orders from all motorbike brands," Soepardi said as quoted by Antara.

Soepardi said Honda currently held 48 percent of the country's motorbike market, producing 900,000 motorbikes a year. He said this would guarantee the garages a solid market.

He said Astra's official garages would get a grant of Rp 13 million in the form of equipment. These grants were exclusive of the 2 percent assistance pledged by Astra.

Soepardi said Astra would also provide technical assistance, such as training and supervision, free of charge, and company insurance through PT Asuransi Astra Buana.

He said Astra also recommended Bank Universal to strengthen the garages' capital structure by providing Rp 5 million to Rp 22 million in loans at a rate of 16 percent a year. (pwn)