PT Indorama sets net profit target of Rp 148 billion

JAKARTA (JP): Publicly listed polyester producer PT Indorama Synthetics has set a net profit target of Rp 148 billion and sales target of Rp 934 billion this year and is preparing capacity expansions to support their goals.

Indorama's Managing Director S.P. Lohia said yesterday after the firms annual shareholders' meeting: "We will invest about US$250 million this year and in 1998, to increase our polyester textured yarn capacity by 50 percent".

The company bucked the industry's trend by increasing its polyester output and exports last year while the world polyester industry suffered a steep drop in capacity utilization.

Indorama said it benefited greatly from being the only Indonesian company exempted from the anti-dumping duties imposed by the European Union on imports of polyester textured yarn from Indonesia last year.

As a result, the company booked a net profit of Rp 122 billion last year from total sales of Rp 678 billion.

Lohia said yesterday the company would provide about 30 percent of the investment and finance, and 70 percent would come from offshore loans.

"But the equity investment will be taken out of our retained earnings," he said.

He said Indorama would also build a power generation plant at its plant in Purwakarta, West Java.

"The power generation project is part of the new investment package," he said.

He said Rp 32.71 billion of last year's profits would be distributed as dividends and the remaining Rp 89.47 billion would be kept as retained earnings.

He said the company's steady performance was supported by its high quality yarn which earned premium prices.

He said the global market, which saw a downward trend in polyester products in the middle of 1995, had recovered in the third quarter of 1996.

He said prices of fibers such as rayon and acrylic were expected to stabilize this year.

"The stability in raw material prices is expected to enable the company to achieve its sales and income targets this year," he said.

Indorama's Senior Manager for Finance V.S. Baldwa said the company had booked total sales of Rp 195.55 billion in the first quarter this year, up 23 percent from Rp 158.06 billion in the same period last year.

The company also posted a net profit of Rp 36.17 billion in the January to March period this year, up 77 percent from the same period last year, Baldwa added.

Indorama Synthetics, which was established in 1974, produces polyester filament yarn, polyester staple fiber, PET resin, spun and blended yarns, polyester fabrics.

The company is 19.79 percent owned by Indorama International Finance PLC, United Kingdom, 38.70 percent by PT Irama Unggul, 4.40 percent by International Finance Corporation and 37.11 percent by the public. The Philippines' Asian Institute of Management judged it the best managed Indonesian company for operations management in 1995. (09)