PT Sierad Produce to offer shares this year

JAKARTA (JP): PT Sierad Produce, a whole-subsidiary of the publicly-listed PT Anwar Sierad, will go public late this year, offering approximately 40 percent of its total shares.

Fadel Muhammad, Anwar Sierad's chief commissioner, told journalists here yesterday that the public offering is aimed to strengthen the Sierad Group's position in the food business.

"We see a prospective growth in the food division. That's why we prefer Sierad Produce to other subsidiaries to go public," Fadel added.

Sierad Produce currently operates in feed production, chicken slaughtering and chicken-based fast food.

Fadel said that the offering's proceeds will be used to finance the expansion of the food division.

He said that in July last year, Sierad Produce issued convertible bonds worth US$19.25 million to strengthen its working capital to finance the construction of a hatchery in Sukabumi, West Java, two feed mills in Lampung and Surabaya, East Java, and several new Wendy's restaurant outlets.

"We have a vision to be an integrated food company. In a few years, you may see food products under Anwar Sierad's brand name just like Indofood," Fadel said.

He said that the details of the public offering can not be disclosed now, "But one thing for sure, it will be carried out late this year."

Sierad Produce has entered the fast food business since December 1994 by acquiring a 90-percent stake in Wendy's Citrarasa, which holds the exclusive Wendy's franchise for Indonesia.

In 1995, Wendy's restaurants contributed 8 percent to Anwar Sierad's consolidated net sales.

Fadel also said yesterday that Anwar Siearad's shareholders have endorsed the distribution of dividends of Rp 35 (1.48 U.S. cents) per share, totaling Rp 4 billion.

Anwar Sierad's president, Budiardjo Tek, said that the management has projected consolidated net sales of Rp 475 billion and net profits of Rp 35 billion this year, as compared to last year's figures of Rp 345 billion and Rp 26 billion respectively.

One of the basic assumptions for such a projection is an estimated decline in the prices of corn and soybean cakes, which were very high last year.

Commenting on the prospect of day-old chicks this year, Bidiardjo said that their selling price is determined by demand and supply, or market force.

"It's nothing to do with the costs of production," he contended.

It implies that a decline in the price of feed does not necessarily mean an increase in day-old chick prices. (alo)