Sinar Mas unit to expand in regional marts

Sinar Mas unit to expand in regional marts

SINGAPORE (Reuter): Indonesia's Asia Food & Properties Ltd (AFP) plans to expand its regional food and agriculture units further, officials said yesterday.

Director and chief financial officer Willie Sia said AFP's takeover this year of failed Singapore property and trading group Amcol Holdings Ltd had helped speed up its expansion plans.

"Amcol's acquisition is to speed up our (regional expansion) exercise, which would otherwise take three to four years," Sia told a news conference.

AFP is the property, food processing and distribution arm of Indonesian group PT Sinar Mas Tunggal, owned by the influential Widjaja family.

For fiscal year ended December 31, 1996, AFP achieved a turnover of about S$1.1 billion (US$764 million). This included S$590.7 million from its agriculture unit, S$267.7 million from property and S$221.3 million from food.

Pre-tax profit was about S$108.7 million.

Sia said the group had chosen to takeover Singapore property and trading firm Amcol because it had some similarities with its core businesses -- agribusiness, food processing and distribution and property -- which it planned to merge.

Amcol went into judicial management in July 1996 after announcing it faced severe cash flow difficulties and could no longer service its debts.

The application for judicial management was made by three creditor banks, OCBC, OUB Bank and the Bank of China.

A report by auditor Price Waterhouse, which was subsequently appointed judicial manager, said Amcol had liabilities of S$1.6 billion on May 31, 1996 and total assets of S$5.55 billion.

AFP's takeover of Amcol involved a share transfer scheme in which four new AFP shares were offered for every three Amcol shares, and one AFP warrant for every 10 offer shares held.

Following the share swaps, AFP owns 76.6 percent of the holding company, while existing Amcol shareholders hold 16.4 percent and Japanese trading houses Nissho Iwai and Itochu hold 1.7 percent and 5.3 percent respectively.

Hendrik Tee, AFP's director and chief executive officer, said the group was talking to several potential strategic partners, including Malaysians, to spur its growth in its core businesses.

As one of Indonesia's largest producer of palm oil, AFP plans to expand its plantations in Indonesia, by the equivalent of two Singapore islands every three years, Tee said.

Plans also included a shift towards higher margin and branded products. It hoped to export more crude palm oil to China, he said. AFP has 336,000 hectares of oil palm plantations, located mostly on the Indonesian island of Sumatra.

Officials said AFP, which is the second largest producer of instant noodles in China in terms of volume and value, intended to increase its China production of instant noodles to 7.8 billion packets in two years time. Production is now at 2.8 billion packets per year.

Six new manufacturing plants would be added to its existing 10 in China, they said.