Strong rupiah may hurt exports: Intikeramik

Strong rupiah may hurt exports: Intikeramik

JAKARTA (JP): Publicly listed porcelain tile manufacturer PT
Intikeramik Alamasri Industri said on Friday the strengthening of
the rupiah could hurt its exports.

Company president Lie Ju Tjhong said that if the rupiah
further surged to below Rp 6,000 against the U.S. dollar, the
target to double its exports this year would be difficult to
achieve.

"We have had very high export orders since the beginning of
this year. But if the rupiah strengthens to less than 6,000 per
dollar, our exports will be hurt," Lie said.

Lie said that currently 60 percent of the company's tile
production is exported, compared to 45 percent in 1998 and 12
percent in 1997.

"The low rupiah value gives added competitiveness to
Indonesian products sold overseas," Lie said after the company's
annual shareholders meeting.

Intikeramik -- the owner of the "Esenza" brand -- previously
sold most of its products at home, but beginning this year put
emphasis on overseas markets due to low domestic demand.

Intikeramik's export sales volume increased to 724,000 square
meters of porcelain tiles in 1998, from 454,000 square meters the
previous year, according to Lie.

"Currently Intikeramik is overwhelmed with abundant export
orders, so our working capital can not keep up," another
executive said.

He said the company's production capacity would soon be
increased by doubling production lines to six units to meet the
growing overseas demand.

"Our exports now go to more than 30 countries as compared to
half that in 1998," he added.

He also said that the company had a sizable stockpile sitting
in its warehouse that had not passed quality inspection in 1993.

"We have just started to sell this ready stock as second
quality product to Vietnam, Cambodia and Lebanon. This should
help finance our increased working capital," he said.

Intikeramik booked a Rp 452.5 billion (about US$67.5 million)
net loss in 1998, compared to a net loss of Rp 29.8 billion the
previous year.

The huge jump in losses in 1998 was attributed to a Rp 240
billion foreign exchange loss from U.S. dollar debt exposure and
burdensome interest expenses that reached Rp 210 billion for the
year.

The shareholders agreed to the company's proposal in the
meeting to forgo dividend for the 1998 financial year. (udi)