BAJA to boost exports to Asean
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Indonesian steel-products manufacturer PT Saranacentral Bajatama (BAJA) is planning to widen its market into neighbouring countries including Malaysia, Myanmar and Thailand to benefit from the low import tariffs established under the Asean Free Trade Area
With the market expansion, BAJA president-director Handaja Susanto said he expected exports would account for about 20 per cent of the company’s total sales.
“We will export our galvanised and Saranalume [aluminium-zinc-coated steel] products. We have had talks with several potential buyers as there are many construction projects in our neighbouring countries, including in Myanmar,” he said.
Under Afta’s Common Effective Preferential Tariff scheme, all 10 Asean member countries agreed to lower their import tariffs to within a range of zero to 5 per cent, beginning January 2010.
The Asean market is expected to boost BAJA’s export income to between US$1 million and $2 million (about Bt30 million to Bt60 million) this year. During the first nine months of 2012, the firm only exported its products to Pakistan, with export revenues of 7.79 billion rupiah (Bt24.9 million).
This year, BAJA plans to manufacture about 124,394 tonnes of steel products, a 20.7-per-cent rise from 2012. Production of Saranalume will be increased by 55 per cent to 64,394 tonnes to meet growing domestic and overseas demand, while the production of galvanised goods will stay at around 60,000 tonnes, according to Handaja.
The increase in production will be supported by the launch of the company’s new product, coloured Saranalume. The firm is currently completing the construction of its colour-coating facilities and is looking forward to offering coloured Saranalume from April.
“In the next few years, we will focus our sales domestically. In Indonesia, coloured aluminium-zinc steel is mostly used to create coloured roof tiles. We hope to sell about 2,500 tonnes of the product per month,” he said.
With the projected increase in production volume, BAJA expects total revenue to increase to between 1.4 trillion and 1.72 trillion rupiah, or a 30-to-60-per-cent rise from 2012 figures.
Handaja predicted that steel’s global average selling price would improve by 10-20 per cent in 2013 and thus help the company achieve its target. It also expects a substantial jump in net profits to 145 billion rupiah this year.
According to Handaja, BAJA suffered substantial foreign-exchange losses last year, which eventually reduced its net profits significantly.
Between January and September, the firm recorded 25.34 billion rupiah in foreign-exchange losses, compared with gains of 3.25 billion rupiah in the same period in 2011. Net profits fell 13.8 per cent to 13.64 billion rupiah from a year before.
