Asahimas to Build $24.5m Glass Plant

The Jakarta Globe, Aditya Wikrama, February 6, 2009 

Indonesia’s biggest glass producer, PT Asahimas Flat Glass Tbk, a subsidiary of Japan-based Asahi Glass Co. Ltd., plans to build a new glass plant at a cost of $24.5 million this year, a company official said on Thursday. 

The new plant will produce energy-saving, chemical vapor deposition, or CVD, flat glass for buildings, which the company said would be mainly exported to markets across the Asia Pacific region. 

“Between 75 percent and 80 percent of the CVD glass will be exported overseas, while the remainder will be sold on the domestic market,” said M. Amien, the sales and marketing manager of Asahimas. 

The company will purchase the machinery for the new plant from its Asahi affiliate in Europe, which manufactures and markets CVD glass across the European continent. 

The project, said Asahimas director Samuel Rumbajan, would be financed internally. 

According to Bambang Tri, a consultant at PT Actual Kencana Appraisal in Jakarta, the investment was opportune and would have good prospects. 

“The investment will have an internal rate of return of 22.1 percent, and a payback period of only four years,” he said. 

Amien said that about 75 percent of its sales last year were of flat glass for buildings, while the rest were of glass for vehicles. “We exported about 55 percent of our production, while the rest was sold on the domestic market,” he said. 

He said that the new CVD products would provide the company with a geographical advantage, “as there’s no other CVD producer in the region, not even Asahi in Japan.” 

Asahimas, Bambang said, had about a 40 percent share of the domestic glass market. 

The company plans to spend about $40 million this year on capital expenditure, with $14 million being earmarked for the overhauling of its existing plants. 

He said the company expected sales to reach Rp 2.1 trillion ($ 180.6 million) in 2008, up about 10 percent from Rp 1.9 trillion in 2007, while for this year the company saw only a slight increase in sales. 

“If we can grow our flat glass sales to the construction industry,” Samuel said, “this would more than offset the expected decline in vehicle glass sales due to the projected slowdown in vehicle sales this year.” 

The company made a profit of Rp 153.1 billion in 2007, and reported earnings of Rp 204.8 billion for the first nine months of 2008. Asahimas shares closed unchanged in Jakarta on Thursday at Rp 1,290.