SMART to divest tuna business shares

JAKARTA (JP): PT SMART Corporation of the Sinar Mas Group, a manufacturer of crude palm oil-based products, announced yesterday it will divest its shares in another loss-making subsidiary in a bid to boost its earnings growth.

The company said in a statement that earlier this year it sold its interest in two subsidiaries, PT Sinar Meadow International Indonesia and PT Smartindo Bluebird Snacks, for Rp 2.1 billion (US$891,719) and Rp 1 billion respectively.

A SMART executive, Tan Siauw Liang, said that the management decided to take the action because the two companies posted combined losses of Rp 10 billion last year.

Smartindo and Sinar Meadow were joint ventures with Goldman Fielder of Australia in a business producing margarine.

Liang said that another subsidiary to be divested is a joint tuna canning venture, PT Sinar Mas Pure Food International, which is expected to suffer losses of Rp 2 billion last year.

The tuna canning company is partly owned by Ayala Group from the Philippines.

He said that the divestment will allow the company to concentrate on its core business as a producer of palm oil-based products.

Liang said that SMART's shareholders endorsed a proposal on the payments of final dividends of Rp 38 per share, totaling Rp 7.9 billion.

SMART's net profits dropped sharply from Rp 40 billion in 1994 to Rp 27 billion last year although its net sales rose 37 percent to Rp 524 billion last year.

Liang also said that SMART's net profits in the first quarter of this year were Rp 10 billion, slightly down from Rp 11 billion in the same period of last year.

He cited weakening crude palm oil prices as the main reason for the plummeting profit. (alo)