JAKARTA (TheInsiderStories) – Coca-Cola Amatil Ltd., (ASX: CCL) says it will write down the value its Indonesian assets to around A$160 million (US$114.28 million) to A$190 million as a result of the pandemic.
“These expected impairments are non-cash accounting adjustments and we remain very confident about the long-term prospects for our Indonesian business,” said the director, Alison Watkins in a statement released on Thursday (07/23).
He said, the Group’ trading volumes in June 2020 were down approximately 9 percent compared to June 2019. This resulted in a second quarter (2Q) decline of approximately 23 percent compared to the prior corresponding period.
In New Zealand, where significant easing of restrictions has taken place, Amatil’ June’ volumes increased approximately 4 percent compared to June 2019. In Australia, the volumes declined approximately 3 percent (non-alcoholic ready to drink volumes declined 4 percent).
In Indonesia, where COVID-19 infection rates remain high, the sales volumes dropped around 23 percent from a year ago. As noted at the May trading update, margins, particularly in Australia, have been adversely impacted by changing consumer behavior due to COVID restrictions.
Watkins stated, “Its encouraging to see the improvement in our volumes as the pandemic restrictions were lifted across a number of our markets. We nevertheless remain cautious, given the reinstatement of lockdown measures from July in Melbourne and the rising COVID- 19 infection rate in Indonesia.“
Recently, PT Coca-Cola Amatil Indonesia has signed an agreement with provider of packaging and plastics catering to the South East Asia & China Market Dynapack Asia to construct polyethylene terephthalate recycling resin facility in Indonesia. According to Kadir Gunduz, President Director of Amatil Indonesia, the plant would reduce the usage of new plastic resin by approximately 25,000 tones per year by 2022 and will help Indonesia’ ambitious plan to achieve 70 percent reduction in the nation’ marine plastic debris by 2025.
Last year, the beverages producer inaugurated the second $24 million affordable single serve package production line at the Pasuruan factory in East Java. The new line will support the manufacturer to supply high-quality lightweight plastic with a glass coating that will increase packaging durability by 260 million bottles annually throughout East Java and Eastern Indonesia, including Bali and the Eastern Islands, Sulawesi, East Kalimantan and South Kalimantan.
At present, East Java contributes 30 percent of the total national production of Amatil Indonesia through the factory which houses seven production lines. Total production at the Pasuruan factory will significantly increase production output by 130,000 preforms per hour, as well as product storage capacity of 40.3 million bottles and 7,100 preform pallets.
In the same year, the company and restaurant operator, PT Fast Food Indonesia Tbk (IDX: FAST) announced a five-years cooperation for its products. At present, Amatil Indonesia serves more than 500,000 customers, in modern and traditional markets throughout Indonesia. The company also operates eight manufacturing facilities, two preform factories and four Mega Distribution Centers.
Since 2014, Unit of United States’ Coca-Cola Amatil has invested more than $379 million in Indonesia, including 22 production lines in South Sumatra, North Sumatra, and Cikedokan plant in West Java. The latest ASSP line was built to assist the company in serving the growing market in eastern Indonesia, along with facilities that were inaugurated in 2017, Mega Distribution Center and Preform factory with a total investment of $68 million.
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