Putra Surya to raise its equity subsidiary

Putra Surya to raise its equity subsidiary

JAKARTA (JP): Publicly listed PT Putra Surya Dumai Industry, a
plywood producer, will increase its equity capital in one of its
subsidiaries, PT Perawang Lumber Industry, by Rp 88.6 billion
(US$36.3 million) to finance the latter's laminated veneer lumber
(LVL) project.

Putra's president, Citra Gunawan, said yesterday the company's
shareholders had agreed to increase its shareholding to 98.5
percent in Perawang by acquiring 88.6 million new shares.

"The fresh funds will be used to shift Perawang's core
business into laminated veneer lumber (LVL) production from the
medium density fiberboard (MDF)," he said after the company's
first annual and extraordinary shareholders meetings.

He said LVL prospects were much better due to its higher
profit margin than the MDF, which was currently experiencing an
excess capacity.

The remaining 1.5 percent of Perawang is owned by the local
village cooperatives around the company's factory in the Riau
Province.

Citra said Perawang planned to start LVL production next year,
and would export most of its output to Japan, the biggest market
in the Asia-Pacific region.

The LVL factory, estimated to cost Rp 120-244 billion, will be
designed with an annual capacity of 72,000 cubic meters.

Citra projected that the Perawang LVL unit would eventually
contribute about 32 percent of Surya's revenue.

Perawang currently produces about 3 million cubic meters of
MDF.

Surya Dumai produced plywood, including primary and value
added or secondary processed plywood, and other wood products
totaling 314,00 cubic meters last year.

The company's net income (profit) rose 57 percent to Rp 44
billion last year, from Rp 28 billion in 1996. Its net sales
rose to Rp 333 billion, from Rp 284 billion in 1996.

This year, the company expects to increase net sales to Rp 350
billion and net income to Rp 52 billion.

The shareholders meetings also agreed on a cash dividend of Rp
100 a share.

Citra said Rp 25 a share, or Rp 10 billion of the dividend,
would be paid from the 1996 net income.

The remaining Rp 75 per share, or Rp 30 billion, would be
taken from its retained earnings before the company went public
last year, he said. (das)