Asahimas Flat Glass Could Increase Its Capital Expenditure

Indonesia’s largest-glass producer Asahimas Flat Glass, a subsidiary of Japan-based Asahi Glass, could increase its capital expenditure by 20 percent next year in anticipation of an increased demand for glass. Rusli Pranadi, Asahimas’s corporate secretary, said the company would spend $30 million next year, up from $25 million this year, for upgrades and maintenance of its furnace in its East Java factory. “The cost will be around $22 million, ” Rusli said on Friday, adding that the rest of the capital would be spent on regular investments. “We will use our internal cash for the investment. ” Asahimas posted a net income of Rp 247 billion ($26 million) in the first nine month of this year, up 7 percent from the same period last year. Revenue increased 13 percent to Rp 2.1 trillion. Asahimas predicts its full-year sales to reach Rp 2.7 trillion this year, up 7 percent from last year. Tjahjana Setiadhi, Asahimas’s vice-president director, said the company was in talks with Japanese car manufacturers Toyota and Daihatsu to supply glass for their new low-cost cars designed for the Indonesian market. Indonesia’s largest-car distributor, Astra International, jointly developed the cars, the Astra Toyota Agya and the Astra Daihatsu Ayla, with Toyota and Daihatsu. The two cars will be priced under Rp 100 million. “We have started the assessment but are yet to talk about how much we will supply, ” Tjahjana said. Astra is waiting for the government to issue a regulation on low-cost green cars, which would lower the tax rate for cheaper and environmentally-friendly cars, before they release the cars to the market. With the low-cost car in the works, Tjahjana said the company anticipates demand will increase for car glass. So far this year, the company has invested about $20 million to increase its capacity to make 5-million-square-meters a year of car glass, up from 3.25-million-square-meters last year, Rusli said. “That capacity equals to 1.3 million cars a year, ” he said. Asahimas hold a 40 percent share of the domestic glass market. About 75 percent of its sales last year was for flat glass for buildings, while the rest was for glass for vehicles. It exported 39 percent of its production, while the rest was sold on the domestic market. Asahimas shares closed at Rp 7, 700 on Friday. Source: thejakartaglobe