MIRA INFORM REPORT

Report Date :

28.04.2011

IDENTIFICATION DETAILS

Name :	P.T. KAHATEX
Registered Office :	Jalan Raya Cijerah - Cigondewah, Girang No. 16, Melong – Cimahi 40534, Bandung, West Java
Country :	Indonesia
Date of Incorporation :	23.09.1980
Com. Reg. No.:	No. AHU-34711.AH.01.02.TH.2009
Legal Form :	Limited Liability Company
Line of Business :	Integrated Textile Industry

RATING & COMMENTS

MIRA’s Rating :

Ca

RATING		STATUS	PROPOSED CREDIT LINE
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security

Status :	Poor
Payment Behaviour :	Slow
Litigation :	Clear

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – December 31, 2010

Country Name	Previous Rating (30.09.2010)	Current Rating (31.12.2010)
Indonesia	b1	b1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

Name of Company

P.T. KAHATEX

company Address

Head Office & Factory I

Jalan Raya Cijerah - Cigondewah, Girang No. 16

Melong – Cimahi 40534

Bandung

West Java

Phones - (022) 6031030 (7 lines), 6031566 (7 lines)

Fax - (022) 6032166, 6031488

E-mail - rc@kaha.com

Website - www.kaha.com

Land Area - 82,000 sq. meters

Building Space - 36,800 sq. meters

Region - Industrial Zone

Status - Owned

Factory II

Jalan Raya Rancaekek Km. 23

Sumedang

West Java

Phones - (022) 7798060 (Hunting) 7792222

Fax - (022) 7798063, 7793111

Land Area - 80,000 sq. meters

Building Space - 42,500 sq. meters

Region - Industrial Zone

Status - Owned

Date of Incorporation

23 September 1980

Legal Form

P.T. (Perseroan Terbatas) or Limited Liability Company

Company Reg. No.

The Ministry of Law and Human Rights

- No. Y.A.5/434/22

Dated 30 July 1981

- No. AHU-34711.AH.01.02.TH.2009

Dated 23 July 2009

Company Status

Domestic Investment (PMDN) Company

Permit by the Government Department

The Capital Investment Coordinating Board

- No. 25/II/PMDN/1985

Dated 1 May 1985

- No. 146/II/PMDN/1992

Dated 25 November 1992

- No. 160/II/PMDN/94

Dated 03 June 1994

- No. 18/II/PMDN/97

Dated 28 January 1997

- No. 28/II/PMDN/1998

Dated 6 April 1998

- No. 286/III/PMDN/1998

Dated 2 September 1998

- No. 72/II/PMDN/2001

Dated 4 December 2001

- No. 40/II/PMDN/2002

Dated 24 September 2002

The Department of Industry and Trade

- No. 633/T/Industri/2000

Dated 19 September 2000

- TDP. No. 102411700092

Dated 28 December 2001

The Department of Finance

NPWP No. 01.104.586.1-092.000

Related Companies

a. P.T. KAHAFEDERAL GARMENTS (Garment Manufacturing)

b. P.T. KAHAFORTUNE GARMENT (Garment Manufacturing)

c. P.T. KAHA SWEETER (Sweeter Manufacturing)

d. P.T. SIN CHEAU INDONESIA GARMENT (Garment Manufacturing)

CAPITAL AND OWNERSHIP

Capital Structure :

Authorized Capital - Rp. 700,000,000,000.-

Issued Capital - Rp. 700,000,000,000.-

Paid up Capital - Rp. 700,000,000,000.-

Shareholders/Owners :

a. Mr. Wijaya Trisna - Rp. 186,000,000,000.- (26.57%)

Address : Komplek Sekneg Blok B No. 20/38

Kel. Sunter Agung, Jakarta Utara

b. Mr. Song Wen Shyang - Rp. 186,000,000,000.- (26.57%)

Address : Jl. Cigondewah Girang RT.002/03

Kel. Melong, Bandung

West Java

c. Mrs. Song Wen Shyu - Rp. 96,000,000,000.- (13.72%)

Address : Jl. Cigondewah Girang RT.002/03

Kel. Melong, Bandung

West Java

d. Mr. Huang Kuen Jeng - Rp. 90,000,000,000.- (12.86%)

Address : Jl. Cigondewah Girang RT.002/03

Kel. Melong, Bandung

West Java

e. Mr. Song Liang Hua - Rp. 72,000,000,000.- (10.28%)

Address : Jl. Cigondewah Girang RT.002/03

Kel. Melong, Bandung

West Java

f. Mr. Song Wen Po - Rp. 35,000,000,000.- ( 5%)

Address : Jl. Cigondewah Girang RT.002/03

Kel. Melong, Bandung

West Java

g. Mr. Song Pei Guan - Rp. 35,000,000,000.- ( 5%)

Address : Jl. Cigondewah Girang RT.002/03

Kel. Melong, Bandung

West Java

BUSINESS ACTIVITIES

Lines of Business :

Integrated Textile Industry

Production Capacity :

A. Initial Plant

Cimahi Factory

a. Acrylic Yarns - 15,500 tons p.a.

b. Woven Fabrics - 36,000,000 mtrs p.a.

c. Knitted Fabrics - 15,600 tons p.a.

d. Jackets & Training-pack - 1,180,000 dozens p.a.

e. T-Shirts - 180,000 dozens p.a.

f. Sweaters - 50,000 dozens p.a.

g. Socks - 8,000,000 dozens p.a.

h. Denim (jeans) - 3,000,000 mtrs. p.a.

i. Cotton Fabrics - 2,000,000 mtrs. p.a.

j. T/C & T/R Yarns - 31,000 tons p.a.

l. Knitted Yarns - 12,000 tons p.a.

Sumedang Factory

a. Yarns - 58,140 tons p.a.

b. Woven Fabrics - 29,000,000 mtrs. p.a.

c. Knitted Fabrics - 24,600 tons p.a.

d. Acrylic Fibres - 50,000 tons p.a.

e. Socks - 5,140,000 dozen p.a.

f. Garments - 1,120,000 dozens p.a.

B. Expansion Plant

Cimahi Factory

a. Knitted Fabrics - 9,000 tons p.a.

b. Woven Fabrics - 6,000,000 mtrs.p.a.

Sumedang Factory

a. Acrylic Fibres - 30 tons p.a.

b. Yarns - 20,000 tons p.a.

Total Investment :

A. Initial Plant

a. Owned Capital - Rp. 400.0 billion

b. Loan Capital - Rp. 565.8 billion

c. Total Investment - Rp. 1,265.8 billion

B. Expansion Plant

a. Owned Capital - Rp. 300.0 billion

b. Loan Capital - Rp. 364.1 billion

c. Total Investment - Rp. 664.1 billion

Started Operation :

1982

Brand Name :

KAHATEX

Technical Assistance :

None

Number of Employee :

4,582 persons

Marketing Area :

Domestic (Local) - 65%

Overseas (Export) - 35%

Main Customers :

a. P.T. Kaha Federal Garment

b. P.T. Kaha Fortune Garment

c. P.T. Sin Cheau Indonesia Garment

d. P.T. Kaha Sweeter Industry

e. Textile Importer of Singapore, Taiwan, Canada, Middle East and European countries

Market Situation :

Very Competitive

Main Competitors :

a. P.T. Panasia Indosyntex Tbk

b. P.T. Argo Pantes Tbk

c. P.T. Candratex Sejati

d. P.T. Eratex Jaya Tbk

e. P.T. Natatex Prima

f. P.T. Sipatex Putri Lestari

g. P.T. Pabrik Tekstil Kasrie

h. Etc.

Business Trend :

Fluctuating

BANKER, AUDITOR & LITIGATION

Bankers :

a. P.T. Bank CENTRAL ASIA Tbk

Bandung Branch

Jalan Asia Afrika No. 122-124

Bandung, West Java, Indonesia

b. P.T. Bank INTERNATIONAL INDONESIA Tbk

Jalan M.H. Thamrin No. 51

Jakarta Pusat

Indonesia

c. P.T. Bank RAKYAT INDONESIA Tbk

Jalan Jend. Sudirman No. 44-46

Jakarta Pusat

Indonesia

Auditor :

Internal Auditor

Litigation :

No litigation record in our database

FINANCIAL FIGURE

Annual Sales (estimated) :

2008 – Rp. 570.0 billion

2009 – Rp. 615.0 billion

2010 – Rp. 680.0 billion

Net Profit (estimated) :

2008 – Rp. 10.5 billion

2009 – Rp. 11.8 billion

2010 – Rp. 27.2 billion

Payment Manner :

Sometime Delay

Financial Comments :

Unhealthy

KEY EXECUTIVES

Board of Management :

President Director - Mr. Widjaja Trisna or William Trisna

Directors - a. Mr. Song Wen Shyang

b. Mr. Huang Kuen Jeng

c. Mrs. Song Ching Shyu

d. Mrs. Kang Tjhui Tju

Board of Commissioners :

President Commissioner - Mr. Song Liang Hua

Commissioners - a. Mrs. Song Wen Shyu

b. Mr. Song Wen Po

c. Mr. Song Pei Guan

Signatories :

President Director (Mr. Widjaja Trisna or William Trisna) and Directors (Mr. Song Wen Shyang and Mr. Huang Kuen Jeng) which must be approved by the President Commissioner (Mr. Song Liang Hua) and Commissioner (Mrs. Song Wen Shyu)

CAPABILITIES

Management Capability :

Fairly Good

Business Morality :

Fairly Good

Credit Risk :

Above Average

Credit Recommendation :

Credit should be extended under guarantee

Proposed Credit Limit :

C.O.D. To small amount

Maximum Credit Limit :

No Comment

OVERALL PERFORMANCE

P.T. KAHATEX was established in September 1980 in Bandung, West Java, with an authorized capital of Rp. 1,000,000,000 and an issued capital of Rp. 200,000,000 of which Rp. 20,000,000 was paid up. The founders and original shareholders of the company are Mrs. Emmy Renoewidjojo and Mr. Tedjo Renoewidjojo, both Indonesians of Chinese extraction. The company notary deed had been changed a couple of times. In 1987 the whole original shareholders pulled out and replaced by Mr. Song Wen Po, Mr. Song Wen Tying, Mr. Song Wen Shyang, his son-in-law Mr. Widjaja Trisna or William Trisna (husband of Mr. Song Chin Shu, first daughter of Mr. Song Liang Hua) and Mrs. Song Wen Shyu. They are an Indonesian business family of Chinese extraction. In November 2000 the authorized capital was increased to Rp. 330,000,000,000 entirely issued and paid up.

Lastly in April 2006, the authorized capital was raised again to Rp. 630,000,000,000 entirely issued and paid up and concurrently whole shares of the company were controlled by Mr. Widjaja Trisna, Mr. Song Wen Shyang, Mr. Huang Kuen Jeng and Mrs. Song Wen Shyu. The deed of amendment was made by Mr. Drs. Yudi Priadi, SH., was approved by the Ministry of Law and Human Right in its Decision Letter No. C-18336.HT.01.04.TH.2006, dated June 22, 2006, and No. AHU-30769.AH.01.02.Tahun 2008, dated June 6, 2008.

The latest in March 2009 the authorized capital was increased to Rp. 700,000,000,000 wholly issued and paid up. With this development the composition of its shareholders has been changed to become Mr. Widjaja Trisna (26.57%), Mr. Song Wen Shyang (26.57%), Mrs. Song Wen Shyu (13.72%), Mr. Huang Kuen Jeng (12.86%), Mr. Song Liang Hua (10.28%), Mr. Song Wen Po (5%) and Mr. Song Pei Guan (5%). The latest revision of notary documents was made by Mr. Drs. Yudi Priadi, SH., a public notary in Bandung and was approved by the Ministry of Law and Human Rights in its decision letter No. AHU-34711.AH.01.02.TH.2009 dated July 23, 2009.

We note that the above Song family is the owner of the entire business stakes of P.T. KAHAFEDEAL GARMENT and P.T. KAHAFORTUNE GARMENT, both active in the garment industry. In addition, they also control 20% of the shares of P.T. SIN CHEAU INDONESIA, a joint venture with SIN CHEAU GARMENT of Taiwan (80%).

P.T. KAHATEX is engaged in integrated textile industry with its plant located at Jalan Cijerah, Kampung Cigondewa, Cimahi, West Java. The company has grown to a large textile complex sprawling over two manufacturing sites at Cijerah, Bandung and Rancaekek near Bandung city, with an area of about 150 hectares. This places the company in the heart of the Indonesia textile industry. The plant had been operating since 1982 and frequently been expanded. In 1992 the company has been operating new plant at Jalan Raya Rancaekek Km.25, Sumedang, West Java. Mrs. Sri, a staff of the company, said that the plant of the company at Jalan Ranca Ekek produces various kinds of textile products including polyester, spinning, knitting and weaving products. In the end of 1993, P.T. KAHATEX took over and operated garment factory owned its sister company P.T. KAHINTEX near by its plant in Cimahi, Bandung, West Java. Both plants have frequently been expanded. In January 1997 P.T. KAHATEX got an expansion permit for both plants, but no realization as yet due to a financial problem and tight banking liquidity. In mid-1998 it got a license to expand its plant in Sumedang, West Java, to produce sport-shoes and component, but no realization as yet.

The company is fully integrated from fiber, spinning mill to fabric, also manufacturing fabrication garment, sweeter garments, sock, blanket supply to multi national consumers. Employ with high technical technician to develop the company modern machinery, to ensure high quality and up to date product. The company has long history of continuous expansion with an ever broadening the product range. Currently the company is a major supplier to Indonesia textile sector and contributes significantly to the export market by exporting more than 35% of its production directly to about a lot of countries world wide. 45% was indirect Export with consumers company, about 20% supply to domestic market. Some 35% of the products is directly and indirectly exported to various countries such as Singapore, Taiwan and European countries, Canada and Middle East and the rest of 65% is locally marketed.

The global economic slowdown since October 2008 has brought negative impact to the company on account of the increasing production cost and basic material prices. Meanwhile, the local TPT (Textile and Textile Products) industries and other factors causing the declining competitive ability of the national TPT products are the increasing production costs, high interest rates, expensive customs office costs, illegal retributions, textile and garment machinery restructuring costs and the rising prices of production components (oil fuel prices and electric base tariffs). We observed that P.T. KAHATEX is classified as a large sized company of its kind in the country of which the operation has been fluctuating the last five years.

The demand for textile chemicals tended to be fluctuating within the last five years in line with the fluctuating of Indonesian textile industry in general. According to the Central Bureau of Statistics (BPS) the Indonesian garments export in 2002 amounted to 333,100 tons (US$ 3,887.2 million) to 339,000 tons (US$ 4,037.9 million) in 2003 to 327.300 tons (US$ 4,351.9 million) in 2004 to 369.500 tons (US$ 4,967.0 million) in 2005 to 399,600 tons (US$ 5,608.1 million) in 2006, to 399,800 tons (US$ 5,712.9 million) in 2007 and to 417,600 tons (US$ 6,092.2 million) in 2008 declined to 393.400 tons (US$ 5,735.6 million) in 2009. The Indonesia textile products export in 2002 amounted to 1,425.9 tons (US$ 3,075.9 million) to 1,307.5 tons (US$ 3,064.6 million) in 2003 to 1,300.4 tons (US$ 3,354.6 million) in 2004 to 1,427.3 tons (US$ 3,704.0 million) in 2005 to 1,477.8 tons (US$ 3,908.6 million) in 2006 to 1,473.6 tons (US$ 4,178.0 million) in 2007 and to 1,312.2 tons (US$ 4,127.9 million) in 2008 rose to 1,369.6 tons (US$ 3,602.8 million) in 2009.

The domestic textile producers are pessimism the textile export in 2009 could match the export numbers in 2008. The blow of the global economic crisis is resulted in the reduced of demand from the export destination countries like the United States (U.S.), Japan, and European Union region. The Export Textiles and the Textile Products (TPT) in 2009 is predicted to fall to 10.2 percent compared to the last year. In the year 2008 the export value reached 10.8 billion US dollars. While this year’s the exports expected fall into US$ 9.7 billion. The Chairman of the Indonesian Textile Association (API), Mr. Benny Soetrisno said that the decline in global purchasing power caused of the demand in the Indonesian textile products could not be able to grow as tight as 2008. The export volume and value of the national TPT products in 2002 to 2009 are pictured on the following table.

Year	Garment		Textile Products
	(Thousand Ton)	(US$ Million)	(Thousand Ton)	(US$ Million)
2002 2003 2004 2005 2006 2007 2008 2009	333.1 339.9 327.3 369.5 399.6 399.8 417.6 393.4	3,887.2 4,037.9 4,351.9 4,967.0 5,608.1 5,712.9 6,092.2 5,735.6	1,425.9 1,307.5 1,300.4 1,427.3 1,477.8 1,473.6 1,312.2 1,369.6	3,075.9 3,064.6 3,354.6 3,704.0 3,908.6 4,178.0 4,127.9 3,602.8

Source: Central Bureau of Statistic

Until this time P.T. KAHATEX has not been registered with Indonesian Stock Exchange, so that they shall not obliged to announce their financial statement. The management of P.T. KAHATEX is very reclusive towards outsiders and rejected to disclose its financial condition. We observed that total sales turnover of the company in 2008 amounted to Rp. 570.0 billion rose to Rp. 615.0 billion in 2009 increased to Rp. 680.0 billion in 2010 and projected to go on rising by at least 4% in 2011. The operation in 2010 yielded an estimated net profit of at least Rp. 27.2 billion and the company has an estimated total networth of at least Rp.720.0 billionSo far, we did not heard that the company having been black listed by the Central Bank (Bank Indonesia). The company usually pays its debts punctually to suppliers.

The company’s management is headed by Mr. Widjaja Trisna or William Trisna (52) with more than 21 years experience in the textile industry and trade. The management is further handled by managers who are professionals in the textile products industry and trade. In daily activities, he is assisted by Mr. Song Wen Shyang (44), Mr. Huang Kuen Jeng (45), Mrs. Song Ching Shyu (52) and Mrs. Kang Tjhui Tju (46) as directors. The management is also handled by a number of professional staff, having maintained a wide business relation with private businessmen at home and abroad as well as with government sector. So far, we did not hear that the management of the company being filed to the district court for detrimental cases or involved in any business malpractices. The company’s litigation record is clean and it has not registered with the black list of Bank of Indonesia.

In view of the operation has been fluctuating in the last five years and the lustrous imported TPT product was to tighten the competition, we recommend to treat prudently in extending a loan to the company.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.40
UK Pound	1	Rs.73.26
Euro	1	Rs.65.17

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
----	NB	New Business	----

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

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