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Rodamas to go public to increase working capital. (Capital Market).

PT Rodamaa, which operates in trading, mining, manufacturing construction and advertising will launch an initial public offering (IPO) for 105 million of its shares with a nominal value of Rp 100 per share. The company hopes to raise fund to finance its program to buy more vehicles to strengthen its distribution networks, construction of new warehouses and strengthen working capital.

By offering around 13.37% of its shares to the public through the IPO, the composition of shareholders of the company will change. Tan Pei Ling, a commissioner of the company and who owns 91.88% of the company will have his share reduced to 73.56% after the IPO. Other shareholders including Iskandar Tanuwidjaja and Ishak Sumarno will also have smaller shares.

The company has an authorized capital of Rp 200 billion with issued capital of Rp 62.8 billion fully paid, leaving Rp 137.2 billion worth of shares in portfolio. After the IPO, the issued and paid up capital will rise to Rp 78.5 billion with shares in portfolio remaining Rp 121.5 billion.

Partly to increase working capital

Many other companies now have launched IPO to raise fund to repay debt, but Rodamas hopes to raise fund through IPO to strengthen its working capital. The company said in a promotional leaflet, it wants to buy more vehicles to support its distribution operation, build new warehouses, increase investment in associated companies, and strengthen its working capital.

The company said in the leaflet, by the end of 2002, it had a total liability of Rp 506 billion and most or Rp 295.86 billion are in short term liabilities. Operating debt contributed the bulk or Rp 207.4 billion to the short term debt. Long term liabilities totaled Rp 210.2 billion mostly in long term loan amounting to Rp 123.2 billion.

Operating income at Rp 295.6 billion

In the beginning Rodamas operated mainly in the distribution of imported products in Indonesia. Later the company, which was established by Tan Siong Kie expanded operations with investment in 24 other companies operating in various business areas including manufacturing of building materials, food processing industry, household equipment and personal goods industry, and chemical industry. Rodamas also distributes goods produced by its affiliates or subsidiaries or other companies in the country.

In 2000-2002, the income of the Rodamas group rose from Rp 80.6 billion in 2000 to Rp 295.6 billion in 2002. Sheet glass products contributed the largest portion or Rp 82 billion to its income in 2002, followed by MSG Rp 72.7 billion and galvanized iron sheets Rp 56.4 billion.

Diversification of products through 24 subsidiaries and associated companies

The types of building materials produced by the Rodamas Group include sheet glass, galvanized iron sheets, louver windows and rolling doors. Sheet glass is produced by Asahimas Flat Glass which has six factories including 4 in Jakarta, one in Surabaya and one in Cikampek. Galvanized iron sheets are produced by PT Tumbakmas Inti Mulia. Louvre windows and rolling doors are produced by PT Dicky Metals and PT Sanwamas Metal Industry.

Food products are produced by PT Sasa Fermentasi, PT Sasa Inti and PT Ajinomoto. Spices and food seasoning, broth, and batter are produced by PT Mitratama Rasa Sejati. Mitratama Kencana Sejati produces sauce including chili sauce, tomato sauce and other types of sauce.

Consumer goods are produced by PT Kao Indonesia including face treatment cosmetics, hair care cosmetics, household goods and cleanser tissue. Salonpas Indonesia produces plaster, liniment and analgesic cosmetic.

In chemical industry, Rodamas has a 18% stake in PT Asahimas Chemicals that produces PVC resin with an annual production capacity of 370,000 tons. PVC compound is produced by PT Riken Asahi Plastics Indonesia which produces that material to be used in the production of cable for automotive industry.

Financial performance healthy

The strong growth in operating income in 2002 had good effect on the financial performance of the company. With operating income of Rp 1.94 trillion in 2002, the company chalked up a net profit of Rp 335.5 billion or a profit margin of more than 20%.

An increase in the net profit and equity in 2002, has improved its rentability ratio. Its current ratios also increased indicating that the company is quite liquid. With a current ratio of 191.8% in 2002, its current assets, therefore, is almost twice larger than its short term liabilities.
Table--1

Share capital of Rodamas before and after IPO

 Description After IPO

 Number of Nominal Portion
 shares (000) value (%)
 (Rpmillion)

Authorized capital 2,000,000 200,000
Issued capital fully paid:
Tan Pei Ling 577,588.0 57,758.8 91.88
Iskandar Tanuwidjaja 33,658.2 3,365.8 5.35
Ishak Sumamo 17,360 1,736 2.77
Owner of convertible -- --
money order
Investing public --
Total issued capital fully 628,606.2 62,860.6 100.0
paid
Shares in portfolio 1,371,393.7 137,139.3

 Description Before IPO

 Number of Nominal Portion
 shares (000) value (%)
 (Rpmillion)

Authorized capital 2,000,000 200,000
Issued capital fully paid:
Tan Pei Ling 577,588.0 57,758.8 73.56
Iskandar Tanuwidjaja 33,658.2 3,365.8 4.29
Ishak Sumamo 17,360 1,736 2.21
Owner of convertible 51,577.6 5,157.7 6.57
money order
Investing public 105,000 10,500 13.37
Total issued capital fully 785,183.8 78,518.3 100.0
paid
Shares in portfolio 1,214,816.1 121,481.6

Source: Rodamas/Data Consult

Table--2

Breakdown of Rodamas' liabilities, By Dec. 31, 2002

Description Total (Rp million)

Short term liabilities:
Bank loan 12,605
Money order payable to party having special 17,184
connections
Operating debt 207,495
Other debts 1,996
Tax debt 12,294
Costs payable 24,469
Part of long term loan maturing in a year. 16,308
Other short term liabilities 3,488
Sub-Total of short term liabilities 295,839

Long term liabilities:
Deferred tax 20,223
Long term loan 123,278
Convertible money orders 66,733
Sub-Total of long term liabilities 210,234
Total liabilities 506,073

Source: Rodamas

Table--3

Operating income of Rodamas, 2000-2002

(Rp million)

Type of products 2000 2001 2002
Building materials:
Glass (9,316) 50,126 82,035
Galvanized iron sheets (38,131) (3,324) 56,414
Louver windows 980 2,102 1,347

Chemicals:
PVC, caustic soda & 29,905 (2,151) 8,708
other chlorine products

Food:
MSG 17,909 45,733 62,782
Other food stuffs 9,120 5,960 5,205

Consumer goods:
Household and personal goods 24,643 22,530 35,960
Analgesic plaster, analgesic 2,025 2,378 4,147
liniment, analgesic cream

Other businesses 43,508 40,491 39,059
Total bperating income 80,643 163,845 295,657

Source: Rodamas

Table--4

Subsidiaries of Rodamas
by sectors of business, 2003

 Name of company Shares Line of business
 owned
 (%)

Tumbakmas Inti Mulia, PT 100 Galvanized iron sheets
Dicky Metals, PT 100 Louver windows
Mitratama Kencana Sejati, PT 100 Sauce
Mitratama Rasa Sejati, PT 100 Spices
Esti Pura Kencana, PT 100 Investment holding
Tumbakmas Niaga Sejati, PT 100 Investment holding
Rodamas International Holdings 100 Investment holding
Rodamas Marketing (s) Pte. Ltd 100 Marketing abroad
Sasa Inti, PT 50 MSG and other seasoning
 products
Sasa Fermentasi, PT 50 MSG
Ajinomoto Indonesia, PT 50 MSG and other seasoning
 products
Kao Indonesia, PT 49.97 Household and personal
 goods
Dai Nippon Printing Indonesia, PT 49 Flexible packaging &
 printing
Asahimas Flat Glass, PT 39.69 Sheet glass
Sanwamas Metal Industry, PT 36.74 Rolling door
Nabisco Foods, PT 30 Biscuit, other snacks
Salonpas Indonesia, PT 25 Plaster and analgesic
 cosmetic
Saint Gobain Winter Diamas, PT 25 Diamond grindstone & cbn
Eratex Djaja, PT 19.6 Textiles
Asahimas Chemical, PT 18 Caustic soda, PVC &
 chlorine
Riken Asahi Plastic Indonesia, PT 10 PVC compound
Kao Indonesia Chemical, PT 5 Chemicals (SO3)
Video Display Glass Indonesia, PT 5 TV Bulbs

Source: Rodamas/Data Consult

Table--5

Consolidated financial balance sheet Rodamas,
2000-2002

(Rp billion)

Description 2000 2001 2002

Total assets 1,340.5 1,556.9 1,859.2
Current assets 404.4 441.1 567.7
Fixed assets 936.1 1,115.8 1,291.5
Total liabilities 499.4 497.5 506.0
Short term liabilities 250.1 253.2 295.8
Long term liabilities 249.3 244.3 210.2
Minority rights 0.1 0.1 0.009
Equity 840.9 1,059.3 1,353.1
Operating income 1,316.8 1,651.8 1,944.2
Net profit 101.8 196.4 335.5
Ratios (%)
Current assets/ 161.6 174.2 191.8
short term liabilities
Net profit/operating income 7.7 11.9 17.2
Net profit/total assets 7.6 12.6 18.0
Net profit/equity 12.1 18.5 24.8
Total liabilities/total assets 37.2 31.9 27.2
Total liabilities/equity 59.0 47.0 37.0

Source: Rodamas/Data Consult
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Publication:Indonesian Commercial Newsletter
Geographic Code:9INDO
Date:May 27, 2003
Words:1499
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