PT Indocement plans to double export volume

PT Indocement plans to double export volume

JAKARTA (JP): Publicly listed PT Indocement Tunggal Prakarsa
expects to double its export volume in 1999 to approximately 2.8
million tons, from some 1.2 million tons last year.

Indocement director Sudwikatmono said on Wednesday the
company's total production would reach eight million tons in
1999.

"We will continue to increase our exports in order to
anticipate the prolonged plunge in domestic demand, as well as to
improve our financial performance," he said after a shareholders
meeting.

Indocement currently sells 30 percent of its total production,
but plans to increase the quota to 50 percent, Sudwikatomono
said.

The company's total export volume of cement and clinker surged
sevenfold in 1998, to reach 1.2 million tons, from 0.17 million
tons shipped in 1997.

Sudwikatmono said last year's exports were worth Rp 257
billion and accounted for 16 percent of total sales.

He said the company, however, performed poorly last year, in
part because of a significant reduction in domestic sales.

Total domestic cement consumption declined to 19.1 million
tons in 1998, from 27.4 million tons in 1997. The sharp decline
was due to the prolonged economic crisis, which has reduced
consumers' buying power and delayed most construction projects.

Indocement's domestic cement sales fell 34 percent to 6.4
million last year.

Indocement reported a consolidated net loss in 1998 of Rp 1.05
trillion, an increase of 179 percent, from a 1997 net loss of Rp
378 billion.

"The net loss increase was mainly due to our foreign exchange
loss last year of Rp 1.08 trillion. Most of Indocement's debts
are in foreign currency," said finance director Benny Santoso.

He said the company decided to record all the foreign exchange
losses in the current year so that the profitability of future
years would not be adversely affected.

He said Indocement was currently undergoing a debt
restructuring program to settle its US$933 million offshore
loans.

"We are still working on it, and hope that the program can be
concluded by the end of this year," he said, adding that the
company expected lenders would agree to reschedule the loans.

Indocement declared in July 1998 a "stand still" position for
all of its debt service obligations. The move was followed by the
establishment of a steering committee by lenders. Chaired by Bank
of America NT&SA, members include The Chase Manhattan Bank, N.A.,
Marubeni Corporation, Bank Nationale de Paris, The Fuji Bank
Limited and Bank of Tokyo-Mitsubishi.

KPMG consulting company was appointed by the committee as
financial consultant. It recommended the lenders move forward on
a debt restructuring program, given the long-term viability of
Indocement.

"The debt restructuring program takes quite a long time
because we are still negotiating with the creditors. We try to
get better terms," Benny said.

To raise funds for debt payments, the company was also
considering the sale of its 35 percent stake in its subsidiary
coal mining company PT Indominco Mandiri, he said.

Indominco operates in Bontang, East Kalimantan, and has an
annual production capacity of 3.5 million tons of coal. It booked
Rp 449.3 million in revenue last year.

"We still don't know the exact value of our stake in
Indominco, but we will obtain significant funds from it," Benny
said.

He said Indocement was considering selling its stake to
foreign investors, including French Lafarge Coppee SA and German
Heidelberger Zement AG.(cst)