F

lat glass manufacturer PT Asahimas Flat Glass (AMFG) says that it expects to reach its net sales target of Rp 2.78 trillion (US$288.38 million) for 2012 on higher demand from local construction firms and automobile makers.

The target is 7 percent higher than the net sales the firm booked in 2011.

The nation’s growing economy contributed positively to the company’s performance during the first nine months of this year.

Asahimas, a subsidiary of Japan’s Asahi Glass Co. Ltd., booked a 13 percent rise in net sales to
Rp 2.09 trillion.

The domestic market continued to dominate the firm’s net sales at 67 percent of the total, followed by exports at 33 percent. Domestic sales topped Rp 1.4 trillion in the first nine months, up 24.1 percent from the same period last year.

“There are more and more construction projects in Indonesia. Car sales also keep on increasing, which yields good results for our business in Indonesia,” Asahimas corporate affairs director Rusli Pranadi said on Friday.

However, Asahimas recorded a 4.3 percent decline in exports from the slower global economy.

The firm reported Rp 689.97 billion in exports between January and September, down from Rp 720.96 billion from the same period last year.

Asahimas sells its products in Australia and New Zealand, in addition to nations in Africa, North America, Asia, Europe and the Middle East.

The firm produces flat glass for construction and automotive glass for cars. Its annual flat glass production capacity reaches 500,000 tons, while its automotive glass production amounts to 5 million square meters, enough for 1.3 million cars.

More than 70 percent of the company’s net sales in the first nine months of 2012 came from the nation’s construction sector, while the remainder came from the automotive industry.

From January to September, the firm’s sales of flat glass for construction amounted to Rp 1.47 trillion, up 7.7 percent from 2011, while automotive glass sales jumped 28 percent to Rp 621.03 billion.

Despite reporting higher net sales, Asahimas reported that net profits increased only 6.3 percent growth to Rp 223.14 billion on increasing costs. The firm’s cost of goods sold increased 14.7 percent to Rp 1.54 trillion, while its sales expenses surged 16.4 percent to Rp 189.34 billion.

The company would increase product prices by 5 to 7 percent to cope with higher costs, Rusli said. Energy and raw materials each account for about 30 percent of production costs, he added.

“With the recent gas price hike and the planned increase in electricity prices next year, we decided it would be best to increase our prices as well, but we will do it gradually,” he said.

Higher raw material prices were also a factor in the decision, he added. To manufacture glass, Asahimas had to import sodium hydroxide from China, India and the US and quartz sand from Belitung in Bangka Belitung province.

According to Asahimas vice president director Tjahjana Setiadhi, the company has been in talks with Japanese car makers Daihatsu and Toyota to manufacture glass for their Agya and Ayla low-cost green cars.

However, he said that the firm would not be the only supplier for the Agya and Ayla projects, as the car makers would involve other companies as well.

To boost future sales, Asahimas will also expand sales coverage for its energy-efficient glass products in Indonesia. It began manufacturing the product in 2010, mainly for foreign markets.

As of September, the company reported total assets reaching Rp 2.99 trillion, while its liabilities and equities stood at Rp 616.31 billion and Rp 2.37 trillion, respectively.

Asahimas shares closed at Rp 7,600 apiece on Monday, down 1.3 percent from Friday.