PT Mulia Industrindo, Indonesia“s leading glass and ceramic maker, has said that it expects strong sales this year, riding a surge in production that was likely to help sharply increase the country“…
PT Mulia Industrindo, Indonesia“s leading glass and ceramic maker, has said that it expects strong sales this year, riding a surge in production that was likely to help sharply increase the country“s capacity. “The sky“s the limit in this kind of business as the housing needs for the lower to middle income brackets are likely to grow sharply, and will not be affected by fluctuations in the property market,” chief operating officer Tony Suryanto said. In an interview he said Mulia expected conservatively to book sales of 560 billion rupiah (US$ 243 million) this year, up sharply from 327 billion rupiah (US$ 142 million) in 1995. This could be even higher if the firm“s new tile factory could be completed ahead of schedule. “The new wall tile factory could be completed in September instead of the previous schedule of December 1996 and this could have a positive impact on this year“s earnings,”, Mr. Suryanto said. Mulia executives estimated total ceramic production in 1996 in the domestic market was likely to reach 450,000 sq. m. per day and 500,000 in 1997 compared with 400,000 in 1995. Total domestic capacity for float glass in 1996 was expected to hit 900,000 tonnes against 600,000 tonnes in 1995. Mulia, accounting for half Indonesia“s capacity, was expanding to capture growing demand for float glass products, where the domestic market is estimated to grow at 15% per year, and container glass, at up to 20%. Marketing director Hendra Heryadi said in an interview that when all the expansion programmes were completed in December this year, Mulia would be the largest producer of ceramic tiles and glass block in Asia and ranked seventh in the world. Suryanto said Mulia Industrindo in September 1995 had started construction of a wall tile factory with production capacity of 250,000 sq. m. per day. The plant, costing some US$ 40 million, is scheduled to be fully commercial in December 1996. He said the wall tile plant was part of an expansion programme which included construction of a third float glass factory with capacity of 600 tonnes per day. The firm“s total production capacity was expected to hit 1,700 tonnes per day for float glass, 40,000 sq. m. per day for wall tiles and 80,000 sq. m. per day for floor tiles after the completion of the expansion programme, Heryadi said. Roni S. Djohan, the firm“s investor relations manager said demand for the firm“s product was likely to remain strong. “Both our tiles and glass products are basically non-value added tiles and glass geared toward non-luxury housing markets which are not significantly affected by the boom and bust of the property market,” Djohan said. Domestic per capita consumption of float glass, for example, was only some 2 kilograms per year in 1995. This compared with 4.5 in Malaysia and 11 in Singapore. Djohan added that the firm in 1995 sold some 40% of its products overseas despite relatively high tariffs imposed on float glass by several countries and expected to increase its share in the coming years on an expected easing of trade barriers in those countries. Mulia Industrindo, a member of the widely diversified Mulia Group, expects a 65% increase in its net profit to 112 billion rupiah (US$ 48.9 million) this year from 67.5 billion rupiah in 1995. Mulia Industrindo has settled a dispute with its labour union over bonus payments. Mr. Surjanto said in a statement that the company had agreed to pay bonus compensations of 80,000 rupiah each to its foremen and 60,000 rupiah each to machine operators. Local newspapers reported that some 6,000 employees went on strike over the bonus payments for Eid al-Fitr, when Moslems celebrate the end of the Ramadan fasting month. Surjanto said the bonus payments would be subject to the necessary taxes. Mulia Industrindo posted a net profit of 67.46 billion rupiah in 1995 (compared with 37.96 billion rupiah in 1994), gross profit rose to 132.50 billion rupiah (100.87 billion rupiah), while operating profit increased to 95.24 billion rupiah (71.57 billion rupiah).