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Jakarta Post

Pan Brothers’ exports surge despite global uncertainties

A leading garment manufacturer, PT Pan Brothers (PBRX), has increased its exports in the first half of this year despite uncertainties in the global economy

The Jakarta Post
Mon, October 1, 2012

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Pan Brothers’ exports surge despite global uncertainties

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leading garment manufacturer, PT Pan Brothers (PBRX), has increased its exports in the first half of this year despite uncertainties in the global economy.

PBRX exports rose by 25.6 percent to Rp 1.09 trillion (US$113.27 million) from figures recorded in the same period in 2011. Exports accounted for 99.2 percent of total net sales during the January to June
period of 2012.

The company’s corporate secretary Iswardeni said over the weekend that the global economic slowdown in the US and Europe, which were the company’s main export markets, did not affect orders for the company’s garments.

The publicly listed company is known for manufacturing a variety of high-end garment goods, with sportswear as its top product. It receives orders from international brands such as Reebok, Nike, Adidas, Calvin Klein and Emporio Armani.

Sales to Europe remained the driving force behind the increase in exports, contributing 47.8 percent to the total figure, followed by sales to the US and other countries with 30.8 percent and 21.4 percent, respectively.

During the first six months of this year, the company saw its European market grow by 26.6 percent to
Rp 519.71 billion from the same period last year. Sales to other countries, which included Australia, Canada and Japan, also surged, climbing more than double to Rp 232.04 billion.

However, PBRX suffered a minor decline in its US market between January and June 2012. Exports to the US fell by 3.6 percent to Rp 334.31 billion from the January to June period last year.

The domestic market showed a positive improvement from January to June 2012 as sales reached Rp 8.17 billion, a 31-fold increase from the same period, last year. However, although recording higher net sales in the first half of this year, PBRX suffered a drop in its net profits as shown in the company’s latest financial report.

Net profits fell 44.8 percent to Rp 22.24 billion as a result of the higher costs of goods sold, operating expenses and interest expenses. In the first six months of this year, costs of goods sold were up 25.5 percent to Rp 960.92 billion. Meanwhile, operating expenses rose by 26.1 percent to Rp 76.07 billion and interest expenses increased 20.8 percent to Rp 14.46 billion.

The company also attributed its net profit decline to foreign exchange losses, which amounted to Rp 19.11 billion in the first half of this year.

PBRX expects to gain Rp 2.82 trillion in net sales by year end, 30 percent higher than in 2011.

To reach the target, PBRX built two new factories with 25 assembly lines and 1,500 machines in Boyolali, Central Java. They are expected to boost total production capacity to 42 million pieces of apparel this year, up 15 percent from 2011. The company currently runs 16 factories.

According to Iswardeni, PBRX will also launch its retail division in the second half of 2012 to seize a bigger market. The new division is expected to contribute up to 10 percent of sales after five years.

PBRX reported that its assets amounted to Rp 1.82 trillion as of June 2012. Its liabilities reached Rp 1.12 trillion, while its equities stood at Rp 704.62 billion.

Local credit rating agency PT Pemeringkat Efek Indonesia (Pefindo) predicts that PBRX will maintain strong overseas and in domestic markets this year as demand continues to grow.

“Nationwide total sales and textile products are expected to reach $21.6 billion this year, up 5 percent from 2011. Sales in the export market are estimated to reach $14 billion, while sales in the domestic market are projected to reach $7.6 billion,” according to a statement issued by Pefindo’s equity and index valuation division.

On Friday, PBRX shares closed at Rp 435 apiece, rising 1.2 percent from the previous day.

—JP/ Tassia Sipahutar

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