Producer of tinplate cannery PT Pelat Timah Nusantara Tbk their allocation for capital expenditure this year from Rp15 billion to become Rp11 billion. Previously in the performance report I-2013 the company allocated capex of Rp15 billion.
Finance Director of Latinusa Slamet Gunawan stated that reduced capital expenditure was deemed necessary when this subsidiary company of Nippon Steel and Sumitomo Metal Corp reviewed their budget for capital expenditure for expansion this year. “The company hardly had any expansion plan this year” Slamet said in his public presentation on Thursday [13/6].
The capital expenditure would be spent on buying new equipments to keep up with accelerated factory revamping program which were already accomplished. One of the fund resources for expansion was from company’s profit thanks to sales increase. Other financing resource was from depreciation.
This year, emitents bearing NIKL shares code set sales volume of 150 thousand tons. This figure was posting increase of 40 percent compared to same edition last year around 110,258 tons. Besides the company set target for increased market share of domestic tin plates by 75%. Today company’s market share settled at the level of 53 percent. By jacking up domestic market share, company’s market share was believed to increase.
As market demand for tin plates at home was extremely high, competitor companies especially foreign companies rushed to grab a chunk of the market share for profit. They were companies from China, South Korea, Taiwan, and Malaysia. Foreign producers were getting more aggressive as the market in Europe and the USA were entangled in financial crisis.
So far the world’s price of tin place was determined by three countries: Taiwan, South Korea, and China. The foreign invasion of imported tin plates troubled PT latinusa. The company had to lash down prices to grab a market share; all in all performance of this PT Krakatau Steel Tbk subsidiary company dropped notably as indicated by increased loss.
The invasion of imported tin plates was the consequences of free trade agreement between Southeast Asian nations and South Korea and China so price was had become inevitable. The lower the price, the more the product would sell. This Management of Latinusa made their complaint to the Indonesia Anti-dumping committee [KADI].
The President of Latinusa Ardhiman intended to set forth anti dumping petition for tinplate products. If the recommended anti dumping charges were approved, price war might be expected to be eased, so healthy business competition could be exercised. NIKL could grab back the market shares at home.
In tandem with the above, Latinusa would strive to increase volume of tin plates sales. Last year, the company succeeded in selling 110,258 tons of tin plates. “This year, production would be increased by 40%” Ardhuman said.
This year, the management expected sales of tin plates could reach 154,361 million tons. Latinusa still focus target on domestic market. Domestic consumption of tin plates was on the average 200,000 tons per year. Hence NIKL’s tin plate products would still be absorbed at the domestic market. Furthermorethe company would also aim sales at new target market i.e. food and canned fruit producers who needed tin plates with high acid content.
Admittedly tinplate products from China had edged aside Latinusa at the local market, which reduced company’s sales income. So far Government’s effort to control invasion of tin plate products was still at minimum. Latinusa expected the Government to immediately apply the SNI quality standardization system to screen off imported tinplate products.
Imported tinplate products which were of low quality were mostly from China. The landslide on tinplate products from China was due to lowered demand for such products in Europe and the USA. The vast market potential in Indonesia, a country with fourth biggest population in the world, tempted China to invade Indonesia’s market.(SS)
Business News - July 19,2013