MIRA INFORM REPORT

Report Date :

19.10.2012

IDENTIFICATION DETAILS

Name :	P.T. SUNSON TEXTILE MANUFACTURER TBK

Registered Office :	Jalan Rancaekek Km. 25.5, Sumedang, Bandung, West Java

Country :	Indonesia

Financials (as on) :	31.12.2011

Date of Incorporation :	18.11.1972

Com. Reg. No.:	No. AHU-AH.01.10-15571

Legal Form :	P.T. Tbk (Perseroan Terbatas Terbuka) or Limited Liability Company

Line of Business :	Integrated Textile Industry

No. of Employees :	2,029 persons

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Status :	Moderate
Payment Behaviour :	No Complaints
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 – June 30^th, 2012

Country Name

Previous Rating

(31.03.2011)

Current Rating

(30.06.2012)

Indonesia

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

INDONESIA - ECONOMIC OVERVIEW

Indonesia, a vast polyglot nation, grew an estimated 6.1% and 6.4% in 2010 and 2011, respectively. The government made economic advances under the first administration of President YUDHOYONO (2004-09), introducing significant reforms in the financial sector, including tax and customs reforms, the use of Treasury bills, and capital market development and supervision. During the global financial crisis, Indonesia outperformed its regional neighbors and joined China and India as the only G20 members posting growth in 2009. The government has promoted fiscally conservative policies, resulting in a debt-to-GDP ratio of less than 25%, a small current account surplus, a fiscal deficit below 2%, and historically low rates of inflation. Fitch and Moody's upgraded Indonesia's credit rating to investment grade in December 2011. Indonesia still struggles with poverty and unemployment, inadequate infrastructure, corruption, a complex regulatory environment, and unequal resource distribution among regions. The government in 2012 faces the ongoing challenge of improving Indonesia's insufficient infrastructure to remove impediments to economic growth, labor unrest over wages, and reducing its fuel subsidy program in the face of rising oil prices.

Source : CIA

Name of Company

P.T. SUNSON TEXTILE MANUFACTURER Tbk

Address

Head Office & Factory I

Jalan Rancaekek Km. 25.5

Sumedang, Bandung

West Java

Indonesia

Phones - (62-22) 7798289-90 (Hunting)

Fax - (62-22) 7798302

E-mail - yarn@sunson.co.id

Land Area - 27,600 sq. meters

Building Area - 25,200 sq. meters

Region - Industrial Zone

Status - Owned

Factory II

Jalan Cijerah No. 54

Bandung, 40213

West Java

Indonesia

Phones - (62-22) 6033046 (Hunting)

Fax - (62-22) 6031735

Land Area - 13,500 sq. meters

Building Area - 12,200 sq. meters

Region - Industrial Zone

Status - Owned

Factory III

Jalan Karawang No. 21-25

Bandung, 40272

West Java

Indonesia

Phones - (62-22) 7200168 (Hunting)

Fax - (62-22) 7200169

Land Area - 12,000 sq. meters

Building Area - 10,000 sq. meters

Region - Industrial Zone

Status - Owned

Date of Incorporation

a. 18 November 1972 as P.T. SANDANG USAHA NASIONAL INDONESIA TEXTILE INDUSTRI

b. 28 May 1976 as P.T. INDO-SUNTEX

c. 24 December 1993 as P.T. SUNSON TEXTILE MANUFACTURER

d. 2 June 1997 as P.T. SUNSON TEXTILE MANUFACTURER Tbk

Legal Form

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

Company Reg. No

The Ministry of Law and Human Rights

- No. Y.A.5/375/10

Dated 16 August 1976

- No. AHU-68856.AH.01.02.TH.2008

Dated 24 September 2008

- No. AHU-AH.01.10-15571

Dated 10 September 2009

Company Status

Private National and Domestic Investment (PMDN) Company

Permit by the Government Department

The Department of Finance

NPWP No. 01.118.504.8-054.000

The Capital Market Supervisory Agency

No. S-1709/PM/1997

Dated 28 July 1997

The Capital Investment Coordinating Board

No. 164/II/PMDN/1997

Dated 5 September 1997

Related Company

A Member Company of the SUNSON Group (see attachment)

CAPITAL AND OWNERSHIP

Capital Structure :

Authorized Capital : Rp. 500,000,000,000.-

Issued Capital : Rp. 292,727,295,250.-

Paid up Capital : Rp. 292,727,295,250.-

Shareholders/Owners :

a. P.T. SUNSONINDO TEXTILE INVESTAMA - Rp. 120,000,000,000.-

b. INSTITITION – FOREIGN - Rp. 104,563,045,250.-

c. Kustodian Sentral Efek Indonesia - Rp. 35,693,604,000-

d. Mr. Sundjono Suriadi - Rp. 17,337,125,000.-

e. Mr. Bernardi Widjajakusuma - Rp. 3,507,875,000.-

f. Mr. Purnawan Suriadi - Rp. 2,737,646,000.-

g. Publics - Rp. 8,888,000,000.-

BUSINESS ACTIVITIES

Lines of Business :

Integrated Textile Industry

Production Capacity :

a. Weaving Yarns - 123,500 bales p.a.

b. Texturizing - 6,000,000 kg. p.a.

c. Weaving Fabrics - 25,200,000 meters p.a.

d. Knitting - 1,600,000 kg. p.a.

e. Dyeing - 9,600,000 meters p.a.

f. Yarns - 68,000 bales p.a.

Total Investment :

a. Equity Capital - Rp. 50.3 billion

b. Reinvested Profit - Rp. 55.1 billion

c. Loan Capital - Rp. 210.4 billion

d. Total Investment - Rp. 315.8 billion

Started Operation :

1973

Brand Name :

Sunson

Technical Assistance :

None

Number of Employee :

2,029 persons

Marketing Area :

Export - 62%

Local - 38%

Main Customers :

a. P.T. SUNSONINDO TEXTILE INVESTAMA (Distributor)

b. PD. SURYA REZEKI (Distributor)

c. Textile industries

Market Situation :

Very Competitive

Main Competitors :

a. P.T. ASIA COTTON SPINNING

b. P.T. NATATEX PRIMA

c. P.T. POLYFIN CANGGIH

d. P.T. SIPATEX PUTRI LESTARI

e. Etc.

Business Trend :

Fluctuating

BANKER, AUDITOR & LITIGATION

Bankers :

a. P.T. Bank CIMB NIAGA Tbk

Jalan Asia Afrika No. 122-128

Bandung, West Java

Indonesia

b. P.T. Bank INTERNATIONAL INDONESIA Tbk

Jalan Asia Afrika No. 132

Bandung, West Java

Indonesia

c. Hongkong and Shanghai Banking Corp. Ltd.

Bandung Main Branch

Bandung, West Java

Indonesia

Auditor :

Koesbandijah, Beddy, Samsi & Setiasih

Litigation :

No litigation record in our database

FINANCIAL FIGURE

Annual Sales :

2008 – Rp. 540.2 billion

2009 – Rp. 427.2 billion

2010 – Rp. 446.6 billion

2011 – Rp. 403.2 billion

2012 – Rp. 226.2 billion (as per 30 June)

Net Profit (Loss):

2008 – (Rp. 68.8 billion)

2009 – Rp. 31.1 billion

2010 – Rp. 9.9 billion

2011 – (Rp. 24.1 billion)

2012 – Rp. 2.4 billion (as per 30 June)

Payment Manner :

Average

Financial Comments :

Satisfactory

KEY EXECUTIVES

Board of Management :

President Director - Mr. Purnawan Suriadi

Directors - a. Mr. Ir. Fransiscus Hadyanto

- b. Mr. Edduardus Gunawan

Board of Commissioners :

President Commissioner - Mr. Sundjono Suriadi

Commissioners - a. Mrs. Mariah Suriadi

b. Mr. Drs. Sidarto Danusubroto, SH.

c. Mr. Bernardi Widjajakusuma

d. Mr. Ali Senitro

e. Mr. Sutomo

Signatories :

President Director (Mr. Purnawan Suriadi) or one of the Directors (Mr. Ir. Fransiscus Hadyanto or Mr. Edduardus Gunawan) which must be approved by Board of Commissioners

CAPABILITIES

Management Capability :

Good

Business Morality :

Good

Credit Risk :

Average

Credit Recommendation :

Credit should be proceeded with monitor

Proposed Credit Limit :

Small amount – periodical review

OVERALL PERFORMANCE

Initially named P.T. SANDANG USAHA NASIONAL INDONESIA TEXTILE INDUSTRI, the company was established in November 1972 in Bandung, West Java with an authorized capital of Rp. 450,000,000 issued and paid-up capital of Rp. 100,000,000. The founding shareholders are Mr. Sundjono Suriadi, his wife Mrs. Mariah Suriadi and Mr. Oemar Suriadi, they are Chinese Indonesian business family. In December 1993 the company was renamed P.T. SUNSON TEXTILE MANUFACTURER. In June 1997 the company renamed to P.T. SUNSON TEXTILE MANUFACTURER Tbk (P.T. SSTM).

In July 1997 P.T. SSTM go public through the Indonesian Stock Exchange (BEI). In June 1998 the issue capital was raised to Rp. 500,000,000,000 issued capital to Rp. 209.176,750,000 entirely paid up.

Then in June 2008 the issued capital was raised to Rp. 292,727,295,250 fully and paid up. The shareholders are P.T. SUNSONINDO TEXTILE INVESTAMA, EAST RISE CAPITAL LTD., EASEFULL ENETERPRISE LTD., Mr. Bernardi Widjajakusuma, Mr. Purnawan Suriadi, Mr. Sundjono Suriadi, Mrs. Mariah Suriadi and Publics. The deed of amendment was made by Mrs. Taty Nurliana, SH., was approved by the Ministry of Law and Human Right in its Decision Letter No. AHU-68856.HT.01.02.TH.2008, dated September 24, 2008. The latest based on notary deed of Mrs. Yohana Noor Indrajati SH, No. 06 dated 17 June 2009 the board of director and commissioner had been changed. The deed of amendments was approved by the Ministry of Law and Human Rights in its decision letter No. AHU-AH.01.10-15571 dated September 10, 2009. Based on Financial Statement per 31 December 2011 the composition of its shareholders has been changed to become P.T. SUNSONINDO TEXTILE INVESTAMA (41%), Institution – Foreign (36%), Kustodian Sentral Efek Indonesia (12%), Mr. Sudjono Suriadi (6%), Mr. Bernardi Widjajakusuma (1%), Mr. Purnawan Suriadi (1%) and Public (3%).

P.T. SSTM was established in the frame works of Domestic Investment (PMDN) facility to deal with integrated textile industry. The company is primarily engaged in the spinning, texturizing, weaving, knitting, dyeing, printing and finishing of yarns, fabrics and other textile products, as well as selling the products. The company has been operating since 19 73 by manages three (3) plants located at Jalan Rancaekek Km. 25.5, Jalan Cijerah No. 54 and Jalan Karawang No. 21-25, all in West Java. P.T. SSTM is a medium-size producer of yarns and the company has expanded several times to increase production capacity. The plant produces Weaving Yarns of 123,500 bales, Texturizing of 6,000,000 kg, Weaving Fabrics of 25,200,000 meters, Knitting of 1,600,000 kg, Dyeing of 9,600,000 meters and Yarns of 68,000 bales per annum. The construction of the above plants has absorbed an investment of Rp. 315.8 billion, come from owned capital of Rp. 50.3 billion, reinvested profit of Rp. 55.1 billion and the rest from loans. Some of the raw materials bought from P.T. POLYCHEM INDONESIA Tbk, P.T. DAN LIRIS, P.T. INDORAMA SYNTHETICS Tbk, P.T. SOUTH PACIFIC VISCOSE and P.T. SEKAWAN. The company is prepared to serve the growing local and international market. Some 62% of the products are exported to almost 20 countries such as America, Australia, Germany, France, Belgium, Italy, Spain, Singapore, Malaysia, Hong Kong, China, Sri Lanka, Bengladesh, the Middle East, West Africa etc. Some 38% of its products are marketed in the country to local textile industries. Yarn products of spinning and texturizing units are marketed by its owned sale agents P.T. SUNSONINDO TEXTILE INVESTAMA and PD. SURYA REJEKI and also CV. PADA MAJU with Sunsonindo brand.

The occurring of the global economic crisis and sharp Rupiah depreciation against the US$ Dollar, Japanese Yen, EUR, followed by fast rising local bank interest rates has also had a negative impact on the company's finances for having resulted in a swelling of the company’s debts out of control. 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).

Generally, the demand for textile chemicals such as dyestuff, textile auxiliaries, and others tended to be fluctuating within the last five years in line with the fluctuating of Indonesian textile industry in general. There are eleven domestic dyestuff producers which are still active with a combined production capacity of 45,620 tons per annum. Some of the largest producers are P.T. DYSTAR COLOURS INDONESIA, P.T. CLARIANT INDONESIA and P.T. COLORINDO ANEKA CHEMICAL. The country’s garment industry is facing serious marketing problem not only in the country but also abroad. 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 rose to 417,600 tons (US$ 6,092.2 million) in 2008 declined to 393.400 tons (US$ 5,735.6 million) in 2009 and 445,200 tons (US$ 6,598.0 million) in 2010 rose to 450.9 ton (7,801.5 million) in 2011.. 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 decrease 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 and to 1,525.9 tons (US$ 4,721.8 million) in 2010 decreased to 1,493.3 tons (5,563.3 million) in 2011.

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. 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 2011 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

2010

2011

333.1

339.9

327.3

369.5

399.6

399.8

417.6

393.4

445.2

450.9

3,887.2

4,037.9

4,351.9

4,967.0

5,608.1

5,712.9

6,092.2

5,735.6

6,598.0

7,801.5

1,425.9

1,307.5

1,300.4

1,427.3

1,477.8

1,473.6

1,312.2

1,369.6

1,525.9

1,493.3

3,075.9

3,064.6

3,354.6

3,704.0

3,908.6

4,178.0

4,127.9

3,602.8

4,721.8

5,563.3

Source: Central Bureau of Statistic

According to the financial statement of the company having been audited by public accountant, sales turnover of P.T. SSTM in 2008 amounted to Rp. 540.2 billion with a net loss of Rp. 68.8 billion declined to Rp. 427.2 billion with a net profit of Rp. 31.1 billion in 2009 increased to Rp. 446.6 billion with a net profit of Rp. 9.9 billion in 2010 and decreased to Rp. 403.2 billion with net loss of Rp. 24.1 billion in 2011. As per 30 June 2012 the sales turnover amounted at Rp. 226.2 billion with a net profit of at least Rp. 2.4 billion. We estimated the sales turnover will be higher by at least 4% in 2013.

Based on information obtained from some customers, the payment habit of the company is smooth ranging from 1 to 3 months. So far, we did not heard that the company having been black listed by the Central Bank (Bank Indonesia). The condense financial statement is shown.

(In million Rp)

Descriptions	30 June 2012	31 December
Descriptions	30 June 2012	2011	2010	2009
A. ASSETS
a. Current Assets	423,926	469,277	479,592	465,693
b. Non Current Assets	399,637	374,173	392,867	411,538
c. Other Assets	-	-	-	-
TOTAL ASSETS = TOTAL LIABILITIES & EQUITY	*823,563*	*843,450*	*872,459*	*877,231*
B. LIABILITIES &STOCKHOLDERS EQUITY
a. Current Liabilities	223,900	256,794	238,461	377,313
b. Non Current Liabilities	298,136	287,581	310,824	186,663
c. Stockholders Equity : Paid Up Capital Additional Paid Up Capital Retained Earnings Total Stock holders Equity	292,727 70,623 (61,822) 301,527	292,727 70,623 (64,274) 299,075	292,727 70,623 (40,176) 323,173	292,727 70,623 (50,095) 312,255
C. INCOME STATEMENT
a. Sales Net	226,236	403,181	446,625	427,198
b. Operating Profit	2,834	(29,397)	(7,064)	6,819
c. Net Profit (loss)	2,452	(24,098)	9,918	31,135

Notes: 31 December 2009, 2010, 2011 by KAP Koesbandijah, Boeddy, Samsi & Rekan

*30 June 2012 un audited

Management of P.T. SSTM is headed by Mr. Purnawan Suriadi (48), a professional manager with experience for some 24 years in integrated textile industry and trade. He is a Bachelor of Science in Business Administration, graduate of Indiana University, Bloomington, Indiana, the USA. But the prime mover is his father Mr. Sundjono Suriadi (76), a top figure and founder of the SUNSON Group. The management is also handled by a number of professional managers with experience and expertise in the business, having maintained a wide business relation among private companies at home and abroad as well as among government agencies. So far, we did not hear that the company’s management involved in a dirty business practice or detrimental cases that settled in the country. The company’s litigation record is clean and it has not registered with the black list of Bank of Indonesia. P.T. SUNSON TEXTILE MANUFACTURER Tbk is sufficiently fairly good for business transaction.

Attachment

List of the SUNSON Group Members

BANDUNG PAKAR, P.T. (Real Estate Development and Management)

Bank BISNIS INTERNATIONAL, P.T. (Banking)

INVETCO NUSANTARA, P.T. (Velvetins Manufacturing)

MAHA MUJUR TEXTILE, P.T. (Textiles Weaving, Dyeing, Printing and Finishing)

MAJU MUSTIKA GARMENT, P.T. (Garments Manufacturing)

PARAHYANGAN POY MILLS, P.T. (Synthetic Fiber Manufacturing)

SUN ANTARNUSA INVESTMENT, P.T. (Trading of Textile Products)

SUNSILON UTAMA, P.T. (Spinning)

SUNPU LEATHER INDUSTRY, P.T. (Leather Goods and Imitation Leather Goods Manufacturing)

SUNSON TEXTILE MANUFACTURER Tbk., P.T.

SUNSONINDO TEXTILE INVESTAMA, P.T. (Trading and Investment Holding)

SURYA REJEKI, PD. (Trading of Textile Products)

WINDU DEWA CHEMICAL INDUSTRY or WIWACI, P.T. (Glass Wools Manufacturing)

Etc.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.52.97
UK Pound	1	Rs.85.45
Euro	1	Rs.69.45

INFORMATION DETAILS

Report Prepared by :

SDA

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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