A deal is expected to be signed
Astra set to enter Aussie automotive components market

ASTRA is close to penetrating the Australian automotive components market, an industry worth A$7 billion (S$6.6 billion) a year. Leveraging on shareholder Cycle & Carriage's familiarity with the Australian motor market (Cycle & Carriage distributes Hyundai and Audi there), Astra has held talks with several parties. They include Pacific Dunlop and Atkins Carlyle, according to director Kour Nam Tiang, formerly Cycle & Carriage's business development manager.

Astra will start with generic components like batteries, spark plugs, shock absorbers, brakes and filters. It will target the replacement market, which according to another director, was "much easier to penetrate".

A deal is expected to be signed "very soon", possibly by middle of next year. While Mr Kour declined to comment on how much it would contribute to revenue, he indicated it would be significant.

As the Australian car market is more than twice that of Indonesia's, directors expect Astra's components export plan to hold immense potential. It would also boost foreign exchange earnings. Currently, Astra exports only about US$120 million (S$208.2 million) worth of goods - mainly components - to Japan and South-east Asia. This is against more than US$1.8 billion of total revenue.

Another business placed on the export programme is palm oil. Danny Walla, director in charge of Astra Agro Lestari, told BT the company will raise export to 40 per cent "in one or two years" - 10 times higher than the level today. Mr Walla said a 50 billion rupiah (S$9.1 million) 5,000-tonne storage facility was being built at Dumai port now, and would be ready by mid-2001. Target markets include Vietnam, Holland and China.

About 93 per cent of Astra Agro Lestari's business is in palm oil. It is the second largest planter-refiner-distributor in Indonesia, which is the world's second largest producer. "In exports, the prices are usually much better. And our quality is quite good, so we can even get premium rates," Mr Walla said. On prospects, Mr Walla said "we still have room for profit margins to go up". Last year, Astra Agro Lestari revenue hit 934 billion rupiah.