PT Kedawung Setia to offer 50m shares

SURABAYA, East Java (JP): PT Kedawung Setia Industrial, a private firm producing enamelware, is offering 50 million new shares to the public with a nominal price of Rp 500 (21 U.S. cents) each.

The company announced in a public presentation here yesterday that the initial public offering of the shares is slated for later this month.

The new shares, together with the company's 100.5 million old shares, will be listed on both the Jakarta and Surabaya stock exchanges.

Harry Tanoesoedibyo, a director of PT Bhakti Investama, the underwriter of the share issuance, said that the new shares will be sold for between Rp 775 and Rp 1,000 each during the primary offering period.

The sales price will offer a price-earning ratio of between seven and nine times.

The company's president, Antonius Baroto Budi Susatyo, said that from the share issuance the company expects to generate some Rp 25 billion.

He said 40 percent of the proceeds will be used to finance the expansion of the egg tray carton plant of the company's subsidiary, PT Kedawung Setia Corrugated Carton Box Industrial.

"The expansion will double the plant's production capacity to 7,000 tons of egg trays per month, from 3,500 tons at present," said Antonius.

He added that part of the proceeds will be used to repay his company's debt and strengthen its research and development.

Kedawung Setia Industrial, founded in Surabaya in 1973, uses cool rolled steel sheets as raw materials in the production of enamelware.

The company will next month increase the production of its enamelware to 15,200 tons per annum from current production of 9,600 tons.

He said there are currently 12 companies producing enamelware in Indonesia with total output of 43,900 tons per annum.

According to Antonius, the market growth is about 4.6 percent per year, while the growth of his firm's production is 10.5 percent. Sixty percent of the production is sold on the domestic market while the rest is exported to the United States, Japan, the Middle East and South Africa.

He said the company's net profits increased by 55 percent to Rp 9.1 billion in 1995 over the previous year.

Its sales revenues increased to Rp 121 billion last year from Rp 100.3 billion in 1994. (15/kod)