Arwana Allocates Rp150 Billion of Capital Expenditure to Increase Production Capacity

INDUSTRY.co.id - Jakarta - The management of PT Arwana Citramulia Tbk (ARNA), a ceramic producer, allocated Rp150 billion of capital expenditure to finance the purchase of new machines to be placed at the company's fourth plant in Ogan Komering ilir, South Sumatra.

"The placement of these new machines aims to increase the capacity of ceramic factory production in South Sumatera along with the increase of ceramic demand in Sumatera region," said Max Tan, Head of Investor Relations of ARNA, recently.

Max said, ARNA ceramic factory in South Sumatra is currently with a production capacity of 8 million square meters per year. In the future, the production capacity will be increased by around 75% to 14 million square meters per year.

"The capex will come from internal cash. According to the plan, the purchase of machines will be done at the end of this year, so the factory can already produce with new production capacity by the end of 2019.

Increased demand for ceramics in Sumatra is in line with the functioning of the Sumatra highway. In addition, the election season of regional head (pilkada) and also presidential election will encourage the increase of money circulation in society.

In addition to South Sumatra, the company also has four other ceramic factories in Tangerang, Serang, Gresik and Mojokerto. Total production capacity of these five factories reached 57.37 million square meters.

Despite the price of gas as the main fuel in the operation of its ceramics factory, ARNA management remains positive in view of the company's business performance this year.

Max said the net profit of ARNA in 2018 is targeted at Rp150 billion with net profit margin of 8%.

By reviewing the 8% net profit margin, the ARNA revenue in 2018 is estimated to reach Rp1,875 trillion. (Abraham Sihombing)