PT Asahimas Flat Glass Tbk announced at the end of November 2006 that it has prepared USD 9.5 million to repair its F-4 furnace in Ancol, Jakarta, in anticipation of increasing demand forecast for 20…
PT Asahimas Flat Glass Tbk announced at the end of November 2006 that it has prepared USD 9.5 million to repair its F-4 furnace in Ancol, Jakarta, in anticipation of increasing demand forecast for 2007. The company said the project is scheduled to run in April 2007. Rusli Pranadi, director of Asahimas, said the company will use its internal cash reserve to finance the project. “The money will be from internal cash we will get when profit improves. We will lower bank loans to ease our balance sheet,” he told the press after the company“s general meeting of shareholders on 24 November 2006. The company said it also has plans to invest USD 1.5-2 million to convert the combustion agent from oil to gas. The conversion will take place at Asahimas facilities in Sidoarjo, which has a capacity of 150,000 tons, and two other facilities in Jakarta, with a capacity of 200,000 tons and 250,000 tons respectively. “The total investment for energy conversion will reach USD 6-8 million, in addition to the cost to improve the furnace, so that the total investment in 2007 will reach USD 15 million,” Pranadi added. Director of Asahimas Samual Lumbayan said that the furnace improvements were approved during the general meeting of shareholders. Business expansion by providing certification services for flat glass and auto glass was also approved during the meeting. “We will move to that service sector as we already have accreditation for laboratory testing of safety glass,” he said. This certification is needed following the application of Indonesian National Standard on glass quality in Indonesia. Pranadi also said that as of September 2006, the company“s net profit was still under pressure due to the oil price increase in 2005. However, he hoped the company would be able to post a net profit of IDR 5 billion for 2006, as the sale of glass is expected to increase following the lower BI Rate. “We hope that net profit will reach IDR 5 billion in 2006. But it will also depend on market demand.” The company said it has also planned to increase selling prices in 2006, as production costs have increased due to a 127% increase in the price of energy in 2005. But he said the company will wait for market response since products from China are 20%-25% cheaper than domestic products. As of September 2006, Asahimas has posted net profit of IDR 2 billion, a decrease of 94% from IDR 200 billion during the same period of 2005.