Jan 26, 2011

Multistrada rebounds 3.57% on ASP hike

Tire maker PT Multistrada Arah Sarana Tbk (MASA) today rebounds 3.57% to Rp290 per share after suffering a consecutive drop of 8.19% in a week trading. The rebound is following the information that Multistrada plans to jack up tires average selling price (ASP).
"Tires price must be increased this year, along with the price hike of raw materials such as natural rubber," said J. Sukarman, Multistrada Corporate Secretary, as quoted by Kontan today.
Multistrada, the producer of Achilles, Corsa and Strada brand tire, aim to jack up the selling price of its tire for the export market by 11%-15% on 1 February 2011.
Head of Investors Relations Multistrada, Even Go said that such hike is merely a strategy to anticipate the hike of raw materials such as natural rubber, synthetic rubber and steel wire.
“The selling prices for car and motorcycle tire in the domestic market rose by 11%-15% since the first week of January while part of the tire product in the export market augmented by 7.5% since November 2010,” he said recently.
According to him the price jump in the market export was conducted gradually, highly depending to the customers.
At the moment, 75% product of Multistrada is sold in the export market while the remaining is marketed through local market.
“By such jump, we expect to maintain the gross margin at 22% as in 2009 and in 2010 where we almost hit the level of 22%,” he said. The hike is applicable for 13 inches-24 inches tires.
Multistrada is currently bolstering its production capacity as it recorded 17,500 units and 8,000 units of production capacity for car and motorcycle in early December 2010.
After the first phase of expansion completed, the car tire production shall soar by 28.57% to 22,500 tires per day in the first half of 2011, compared to 16,000 tires per day.
After the second phase of the expansion completed, the production capacity of car tire may surge to 28.500 units in the end of the year.
“Besides raising the sale price, we also impose the mixed product management since every product size poses different margin. We also establish a particular allocation for our product,” said Even.

Disclosure: No position at the stock mentioned above.  

Print This Article

No comments: