Tifico plans a rights issue for expansion

Tifico plans a rights issue for expansion

JAKARTA (JP): PT Teijin Fiber Corporation (Tifico) plans to make a rights issue in the near future to finance its US$90 million expansion plan, an executive of the company, Mardjono Reksodiputro, said yesterday.

Mardjono told the company's annual shareholders meeting here that the plan is crucial for the company and in urgent need of shareholder approval.

Tifico, which produces polyester filament yarn and rayon staple fiber, suffered supply shortages of raw materials in the few years prior to 1993 due to the increased market prices for purified terephthalic acid and ethylene glycol.

But for the year ended on June 30, 1995, the company reported Rp 18.06 billion ($7.88 million) in net income, compared to a net loss of Rp 11 billion the previous year.

The shareholders agreed that 30 percent of the income will be paid out as final dividends at Rp 150 per share for the 1994-1995 year, which ended on June 30.

Tifico's president Kikuo Hori said that the dramatic turnaround from loss to profit was caused by the increase in net sales to Rp 389.97 billion.

"The sales volume and value grew over the previous year by 25 percent and 67 percent respectively, in spite of a continuing increase in the worldwide prices of raw materials," said Kikuo.

Kikuo also remarked that following the difficult year of 1993, the company began in August 1994 to diversify its products into partially-oriented yarn and compound-textured yarn with a daily capacity of 16 tons and four tons respectively.

Tifico's polyester filament yarn production in 1994-1995 ran at approximately 175 tons per day and rayon staple fiber at 110 tons per day. (08)