Bakrie Keen on Korea Move to Boost Automotives
Bakrie & Brothers, the holding company for the Bakrie family’s business interests, plans to boost the performance of its automotive components manufacturing unit, Bakrie Tosan, through acquisition.
“Bakrie Tosan is eyeing one of the subsidiaries of Korindo,” Bobby Gafur Umar, chief executive of Bakrie & Brothers, said on Wednesday without giving details of the acquisition target.
Korindo is the Indonesian unit of South Korea’s Donghwa Enterprise. Its interests include logging, pulp and paper, logistics, trading, properties and automotive.
Its subsidiary Korindo Heavy Industry recently made headlines after a contract to distribute Hyundai trucks and buses in Indonesia was abruptly terminated by the principal, South Korean Hyundai Motor.
Bobby said his company expected the agreement to be concluded in June.
A source close to the matter told Investor Daily, a sister publication of the Jakarta Globe, that Bakrie Tosan had set aside Rp 300 billion ($31.8 million) from its internal cash to finance the acquisition.
Bakrie Tosan has been growing 25 percent to 30 percent in the past three years. Revenue at the company was Rp 500 billion last year, with earnings before interest, taxes, depreciation and amortization at Rp 130 billion.
Bobby said revenue was expected to grow 40 percent to Rp 700 billion this year and would reach Rp 1 trillion in 2013 should plans for acquisition and factory expansion materialize.
“We are also aiming to raise Rp 1 trillion through an initial public offering,” he added, without giving further details.
Additional reporting by Tito Summa Siahaan