Sep 20, 2010

Multistrada sets US$129 mio capex

Publicly listed PT Multistrada Arah Sarana Tbk, Arcilles, Corsa and Strada-brand tire producer, provides US$129.5 million over the next 2 years to extend its production capacity.
The company management on its press statement this afternoon explained that the amount of the capital expenditure excludes the routine capital expenditure reaching US$55.5 million.
The company has secured 5 year syndicated loan facilities from several banks such as Bank International Indonesia, Bank CIMB Niaga, and HSBC amounting US$143 million. Apparently, Unicredit AG Jerman had also granted 6 year loan valuing US$42 million.
The tire capacity expansion will cover the tires used in the passenger car and motorcycle. The expansion plan shall be divided into two phases, the first phase to be completed in December 2010 and second phase to be finished by the end of the first half of 2010.
During the first phase, the company plans to jack up the tire production of passenger cars up to 22,500 tires per day as it will also foster the production of motorcycle tires into 16,000 tires per day.
For the second phase, the company expects to further improve the production of car tires into 28,500 tires per day while it maintains the production of the motorcycle tires at 16,000 tires per day.
At the moment, the company’s production capacity reaches 17,500 tires per day of 70%-80% is exported to more than 60 destination countries.
Meanwhile, for the motorcycle tires, the production reached 8,000 tires per day. The motorcycle production was fully allocated to the domestic market.
“The company chose to conduct expansion following the increasing demand of export particularly from US as one of our main destination country. At present, US imposes import duty for any Chinese tires,” said Even, Head of Investor Relations PT Multistrada Arah Sarana Tbk.

Disclosure: No position at the stock mentioned above.  

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