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Imora Group.

The embryo of the Imora Group was a trading company established in 1952 by Hadi Budiman, an ethnic Chinese. The embryo company Soei Hin Kongsie established cooperation with F. Kanematsu & Co from Japan, now known as Kanematsu Corp. Later Soei Kngsie also cooperated with a number of other Japanese companies including C. Itoh & Co. Ltd. (now Itochu Ltd.), Marubeni and Iwai Sangyo Ltd. in textile trading.

Until 1960 Soei Hin Kongsie regularly imported textiles from Japan, but unfavorable political condition hampered its textile trading business. A number of textile trading companies including Soei Hin Kongsie, therefore, decided to change business.

In 1963 Hadi Budiman embarked on a larger business venture in automotive sector. He started by importing 180 units of Holden sedans from Australia. It was a successful start in the new venture. In the following year, Hadi Budiman imported 1,000 units of Vespa scooters from Italy. This was also a big success. The market fully absorbed the scooters.

Currently the Imora Group is headed by Hadi Budiman's sons Dharmadi Budiman and Kusnadi Budiman with core business in automotive sector including car component industry. The company group also has subsidiaries operating in textile, paper, and resort operation business and as investment holding.

Car trade

In 1960, Hadi Budiman acquired PT. Matahari, which was later renamed PT Imora (Istana Mobil Raya). It was later appointed by Honda Motor Corp.of Japan as sole agent for Honda cars in Indonesia. Its office is located at Jl. Raya Jayakarta No. 137 in Jakarta. It has sales center, workshop and Honda car service center in that location.

In 1970, PT. Imora started importing spare parts and cars in completely knocked down (CKD) form to be assembled in the country by the Indonesia Service Company (ISC). For two years until 1972, the business was in the red.

In 1973, it launched small car, Honda Life 360 cc with four doors. The car was imported directly from Japan and it sold well in the country. Imora succeeded in selling hundreds of units a year. The success, however, did not last long. In 1975, Honda Life was replaced with Honda Civic 1,300 cc in hatch back model this model turned out to be highly popular and attracted many buyers. In Indonesia, sales of Honda Civic averaged 3,000 units per year. At that time its closest rivals were Nissan, Toyota Corolla and Subaru.

In 1978, a new model of Honda Accord 1,600 cc was launched and it successfully drew buyers. In a year, sales of the new model reached 2,000 units. Its rivals at that time were Mitsubishi and Toyota Corona. Honda Accord led in bringing about the success of Honda car sales on the domestic market.

In the period of 1983-1990, all products of Honda sedan led in the market in their respective classes. Honda grabbed up to 35% of sedan market in the country. Honda Civic and Honda Accord were the best sellers at that time.

Assembling cars

In 1975, the Imora Group established PT. Prospek Motor to operate in car assembling industry with factory located at Sunter, North Jakarta.

In 1978, the government devalued the rupiah by 50%, cutting the rupiah value from 415 per U.S dollar to 624 per dollar. The rupiah devaluation served a big blow to Prospek Motor as it has a debt in U.S. dollar to First National Citibank (Citibank). The repayment burden of the debt swelled. Prospek Motor asked for a 5-year roll over. Citibank approved, but Prospek Motor was able to settle the debt before five years.

Later PT. Prospek Motor and Honda and Kanematsu established a joint venture PT Honda Prospek Motor Engine Manufacture (HOPE) to produce Honda cars. In 1997. PT Imora was merged with HOPE into PT. Honda Prospect Motor. In 2003 PT Honda Prospect Motor (HPM) and Honda Motor Co. Ltd of Japan respectively with a share of 49% and 51% build a car factory in Karawang, West Java. Honda chose to build the factory in Indonesia partly thanks to success of Honda sales in the country by the Imora Group. In addition auto industry grew fast in the country.

The initial investment in the factory, which was built over a land plot of 512,500 m2, was US$ 30 million with production capacity of 40,000 units a year. Total investment by Honda in the Karawang factory reached US$ 70 million. The Karawang factory is designed to take over all Honda car manufacturing activities in Indonesia. The factory is the second owned by Honda after the old one in Sunter, Jakarta, which has a production capacity of 17,000 units per year.

The commissioning of the factory coincided with the operation of a plant of Honda Precision Part Manufacturing, which is owned by the Honda principal in Japan. Honda Precision produces Honda car spare parts and components. Early 2007, HPM Karawang in West Java produced its 100,000th. The entire production lines of Honda Karawang factory sue high technology equipment allowing it to operate at high capacity with high quality. The factory is equipped with robotic machinery technology in the production of Honda Jazz and CR-V.

Among the latest technologies used by the Karawang factory is Painting robot which is used in the process of painting the car bodies. The company invested US$ 1 million in for the painting robot. It has been used in Karawang since 2006. Robotic technology and high technology machines have also been used in all phases of production from the process of welding, painting, assembling, to vehicle quality control. High technology equipment has increased the production capacity of the factory. The factory started operation in 2003 with a production capacity of only 30 units of car per day. Currently the factory has a maximum production capacity of 210 units of car per day.

HPM has increased the program of Green Factory in the factory complex in the Industrial Estates of Mitra Karawang. HPM observes the program of reducing emission of CO2, which has been reduced 9.4% in the past three years.

Spectacular success in the sales of Honda Jazz in 2008 encourages HPM to offer cars with small engine capacity. Currently HPM plans to launch new products and improve after sales service.

Honda Jazz, which is categorized as low MPV car with i-VTEC engine is the most popular in the domestic market at present. Honda Jazz is the largest contributor to Honda sales accounting for 22,339 units of Honda car total sales of 52,500 units in 2008.

In the mini sedan class, Honda City recorded sales at 3,879 units in 2008. In small sedan class, Honda Civic reached 2,939 units in sales that year. In medium sedan market Honda Accord recorded sales at 2,080 units in the same year. In the MPV class, Honda Odyssey recorded sales at 244 units.

In 2008, HPM ranked among five largest car makers in the country with sales at 52,500 units after Toyota, Mitsubishi, Daihatsu and Suzuki.

In 2009, car market is predicted to shrink by 30% but HPM is set to launch cars with new models. Cars with small engine capacity of 1,500 cc are expected to sell better in 2009.

HPM seeks to keep the loyalty of its consumers by continuing to improve its service by expanding the network of it's after sales service units. In 2008, HPM had 84 dealers all over the country. Additional dealers came on line in Jakarta, Semarang, Tanjung Pinang, Karawang, and Tegal. In 2009, HPM plans to have 8 more dealers with an investment of Rp 182 billion bringing the number of its dealers to 92 units. In the Greater Jakarta alone it has 29 dealers.

The rising value of the rupiah in 2009 encouraged a number of sole agents to plan the launching of new products in Indonesia. HPM plans to launch Honda Freed in mid 2009. Indonesia will be the first country to launch that model in Asia.

PT Honda Precision Parts Manufacture (HPPM) which operates in car component industry started operation in 2003; HPPM had a production capacity of 375,000 units of automatic transmission per year.

In mid 2008, HPPM succeeded in producing its 1 millionth unit of Automatic Transmission gear. From its factory in Indonesia, HPPM supplies 20% of Honda car automatic transmission gear requirement in the world.

Apart from cars and components Honda Motor Co also has unit in Indonesia to produce motorcycles with Honda brand which dominates the domestic market.

The Honda transmission gear plant in Indonesia is the third largest owned by Honda in the world after one in Japan and the United States. Honda Motor Co. has 5 transmission factories in the world.

HPPM provides strong support for the production of Honda cars in Indonesia especially with the growing trend in the use of automatic transmission gears in the country. Currently, around 72% of Honda cars sold in the country use automatic transmission gears.

HPPM hopes to produce its next 1 millionth units of automatic transmission in three years instead of five year previously to keep pace with growing demand in the country and abroad.

So far, around 95% of automatic transmission gears produced by HPPM are exported to 12 countries including Thailand, Malaysia, Brazil, Mexico, Britain, and India. In the country the remaining 5% are used only by Honda Jazz and CR-V

Since it started operation early 2008, HPPM has recorded US$1.9 billion in export sales. In the first quarter of 2009, it hopes to chalk up US$470 million in exports.

Textile Industry

The Imora Group also has business units in other sectors such as in textile industry under PT. Century Textile (Centex). Centex is a joint venture between Imora through PT. Budiman Kencana Lestasi (12%), PT. Prospect Motor (12%) and easterntex (10%) with a number of investors from Japan--Toray Industries (30%), Kanematsu (23%), and investing public (13%) The company operates in yarn spinning, textile weaving and dyeing.

In 2007, Centex acquired a number of machines valued at Rp12 billion Centex bought the machines for the production of wide textile sheets including 16 units of Air Jet With Dobby Staubli the type of 2871, one unit of Direct Warper, and one unit of sizing machine type of Mackee Hawk II. Currently it has 78 spinning units (33,536 spindles), 352 weaving (Air Jet Loom Single width) units and six units of Air Jet Loom Double width machine.

The additional machine increased its capacity to around 5 million yards per month. in 2008 from 4 million yards per month in March 2007.

In 2007 Centex reported an income of Rp 268.2 billion, with net profit at Rp37.8 billion.

Apart from Centex, the group has two other subsiidaries PT Easterntex and PT Nikawa Tex--operating in textile sector.

PT. Easterntex operates in yarn spinning industry. In 2002 it increased the number of its spindles by 32,000 units and in 2008 it increased the number further by 4,000 units.

Paper Industry

PT Blauw started operation as paper importer in 1960. Later the company was renamed PT Warga Djaja to operate as distributor of paper, textiles and stickers.

In 1986, the Imora Group expanded its wings by acquiring paper factory PT Parisindo Pratama which is located at Gunung Putri, Bogor, and West Java. The factory produces security paper, carbon paper, yellow release paper, bread paper, colorful papers for used in parties. The company suffered a loss in the first year of its operation on swelling foreign debts.

Holding company

The Imora group has a holding company PT. Budiman Kencana Lestari (BKL) operating in investment holding. The company was established in 1994 managing all profits of companies under the group for the Budiman family members.

At present PT. Budiman Kencana Lestasi holds 10.2% shares of PT. Century Textile Tbk (Centex).

Golf course and resort area

The Imora Group also has business units in golf course and resort area operations. The business is relatively small coming on line in the middle of the 1990s.

Gunung Geulis Country Club operates a golf course and a resort area occupying a land plot of2,000 sq.m. In Bogor, West Java. It a joint venture between Kanematsu Corp, Colliman Ltd. and Mulia Dipta Jaya.

Members of the group :

1. Honda Prospect Motor, PT (car assembling industry)

2. Honda Precision Parts Manufacture, PT (car components industry))

3. Century Textile Tbk, PT, PT (textile industry)

4. Easterntex, PT (textile industry)

5. Nikawa Tex, PT (textile industry))

6. Parisindo Pratama, PT (paper industry)

7. Budiman Kencana Lestari, PT (investment holding)

8. Gung geulis Countyr Club (golf curse dan resort)
Table--1
Sales of brands

 Sales Share
Brands (units) (%)

Toyota 212,150 34.9
Mitsubishi 87,524 14.4
Daihatsu 78,044 12.8
Suzuki 73,066 12
Honda 52,500 8.6

Source: Gaikindo

Table--2
Highlight of financial statement of PT. Century Textile Tbk

(Rp million)

Uraian Sept, 2008 Dec, 2007

Asset:
Current Asset 202,345 183,032
Fixed Asset 228,825 223,079
Other Asset 22,258 18,628
Total Asset 453,428 424,739
Liabilities:
Current Liabilities 226,384 177,080
Other Liabilities 153,375 154,675
Total Liabilities 379,759 331,755
Equity 73,669 92,984
Total Equity and Liabilities 453,258 424,739

Revenue 280,006 268,182
Loss (19,315) (37,800)

Source: Centex

Table--3

IMORA Group

Parent company PT. Honda Prospect Motor

Address Jl. Gaya Motor I, Sunter
City Jakarta 14330
Phone(s) (021) 65110403, 6511286
Fax. (021) 6512177
E-mail hpm@cbn.net.id, prospect@rad.net.id
Number of companies 7 Companies
Lines of business car assembling industry
 -car component industry
 -paper industry
 -textile industry
 -golf hotel & resort management

Source: Honda Prospect Motor
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Title Annotation:COMPANY PROFILE
Publication:Indonesian Commercial Newsletter
Article Type:Company overview
Date:Jan 1, 2009
Words:2285
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