Message from the President Commissioner
Dear Esteemed Shareholders,
APF was able to deliver a strong performance in 2010 with significant improvement in EBITDA over 2009, with $68.2 million on sales of $489.9 million, driven by recovery of primary markets worldwide and robust market conditions for Polyester influenced by cotton shortages and spurt in Cotton prices. Capacity utilization improved to over 95% through the year, especially the Fiber operating rate reached the peak. The Company managed to post substantial improvements in EBITDA primarily due to improved polyester margins, favorable raw material supply contract terms and the working capital support received from our majority secured creditors, plus financing facilities provided by some customers and suppliers. Significantly, the Company continues to sustain and increase domestic market shares for all products. However, the impasse on the solution for its secured debt restructuring continued through the year 2010, despite our sustained efforts.
The political and economic stability achieved so far in Indonesia is expected to continue with the GDP growth of over 6% in 2011-12. Indonesian economy withered the economic slowdown experienced in the Western Countries in 2009-10 and came out fairly unscathed. With inflation under check and the strong rupiah vis-à-vis USD left the general public with a reasonable disposable income to boost the domestic consumption. Global financial recovery is set to continue and financial conditions in most regions are expected to remain stable. The trend of 2010 buoyancy in the polyester industry is expected to last through 2011, influenced by the Cotton factor. Global polyester growth is expected to continue at the rate of 6% in next few years to support the operating rates. The Indonesian textile industry (the Company‟s primary customer base) is expected to get a boost by the increased outsourcing of western/ developed countries towards lower cost countries in Asia. Hence the demand in domestic market is expected to remain strong, despite price fluctuations. The Company will also be able to get entry into high growth non-textile sectors and, like non-woven sectors as result of its Capex investments.
We are proud to state that the company undertook capex investments to have facility to produce "green label products" in line with its commitment towards environmental conservation and sustainability.
Mr. Peter Stanley Grant had resigned from Board of Directors of the Company and was relieved from his position of Director (Finance) in the Extra-ordinary General Meeting of the Share holders held on 10th February 2011. The Board of Commissioners wishes to place on record its appreciation of his service and contribution to the Company during his tenure.
The Commissioners wish to extend their appreciation to the Directors and all APF employees for their continued efforts and dedication throughout 2010 which can be deemed a year where the company continued to seek restructuring solutions whilst strengthening its strategic market position. The Company continued to improve its corporate governance standards and complied with the various regulations and requirements by BAPEPAM and BEI. We also wish to acknowledge our sincere gratitude to our customers, suppliers, and shareholders for their continued support and the confidence they have entrusted to the Company in this critical transition period.
Robert Clive Appleby
President Commissioner