PT UIC plans to establish $7.25m subsidiary in Vietnam

PT UIC plans to establish $7.25m subsidiary in Vietnam

JAKARTA (JP): PT Unggul Indah Corporation (UIC), Indonesia's
only producer of alkylbenzene, will establish a subsidiary in
Vietnam, distribute cash and share dividends and issue bonus
shares.

The company's president, Johannes Kotjo, said after annual and
extraordinary meetings of its shareholders yesterday that the
planned Vietnamese subsidiary, called UIC Vietnam Co. Ltd, will
produce alkylbenzene sulfonic acid and sodium lauryl ether
sulfate, chemical substances used for the production of
detergent.

"The operation of UIC Vietnam will be beneficial because it
will use Alkylbenzene from UIC and the prospect of its business
is bright because it will be the only producer of such a chemical
substance in Vietnam, a country with a population of 70 million
people whose economy is expanding rapidly," Kotjo said.

The establishment of UIC Vietnam will need US$7.25 million in
investment, of which $2.75 million will be provided by UIC and
the other $4.5 million from banking loans, he said.

"The company's expansion in Vietnam will not cause capital
flight because the borrowing will come from foreign banks," he
said. Furthermore, profits from the Vietnamese operation will go
back to Indonesia."

He said UIC, listed on the Jakarta and Surabaya stock
exchanges, will be the sole owner of UIC Vietnam which is
expected to start operating later this year with a production
capacity of 30,000 tons per annum.

New unit

Kotjo said UIC will also invest about $50 million to $60
million for the construction of its third processing unit in its
industrial complex in Serang, West Java.

The new unit will not increase UIC's annual production
capacity, which last year increased to 150,000 tons from 90,000
tons, but it will make the company more flexible in making
biodegradable Linear Alkylbenzene and use cheaper raw materials.

Kotjo also explained that UIC will distribute 1-for-7 share
dividends and cash dividends of Rp 150 per share from its 1993
profit.

The operational profit actually increased by 17.1 percent from
Rp 38.85 billion in 1992 to Rp 45.52 billion last year but
because its non-operational revenues fell by 37.1 percent while
its tax payments rose 32.8 percent, its after-tax profit declined
by 10.6 percent from Rp 38.48 billion or Rp 583 per share to Rp
34.37 billion or Rp 521 per share.

The issuance of bonus shares, which will come from the
capitalization of agio from the public offering in 1989, will not
increase the value of investors' capital and can cause declines
in the prices of the company's shares on the capital market.

UIC's shares were quoted at Rp 6,075 per share on the JSX on
Wednesday.

The cash dividends will be distributed on Sept. 12 to those
listed as share holders on August 12, while the stock dividends
and bonuses will be distributed after an approval from Ministry
of Justice on the changing of the company's statute.

Kotjo said PT UIC's production last year increased by 34
percent to 120,000 tons.

UIC's main products are branched alkylbenzene (BAB) and linear
alkylbenzene and its byproducts are heavy alkylate and light
alkylate.

UIC's subsidiary, PT Petrocentral, produced 44,192 tons of
sodium trypoly phosphate last year, which indicated a 10 percent
increase over 1992.

IUC's sales increased by 18.6 percent to Rp 175 billion last
year, while the sales of Petrocentral rose 13 percent to Rp 62.8
billion. About 95 percent of the two companies' production is
sold domestically and the remainder is exported.(yns)