Astra International (PTAIF, quote), Indonesia’s largest auto distributor, recently reported a 30% increase in net income and is now eager to build out into other areas of the local economy.
Astra, which is best-known for its stake in the archipelago’s automotive industry and its partnerships with Toyota, Honda, BMW and others, has been thriving as a result of robust domestic automotive sales.
“In the first nine months of 2011, Astra Group put in a strong performance, which was supported by the growth of domestic demand and increasing commodity prices,” said Prijono Sugiarto, president director of Astra International, according to the Jakarta Globe. “We hope this situation will continue to the end of the year.”
This is a company that generates $1.5 billion in profit a quarter, and as its revenue growth of 27% indicates, it is not only growing, but growing more efficient over time.
With an eye on further expansion — Astra also has business divisions in financial services, heavy equipment and mining, agribusiness, infrastructure and logistics, as well as information technology — the company will allocate at least $1.5 billion for capital expenditure next year.
The goal is to further develop automobile production as well as infrastructure and financial services, according to company director Gunawan Geniusahardja.
“The allocation is for many things, including strengthening our infrastructure business, increasing the production capacity of our plants and product development, which of course are adjusted to our long-term strategy,” Gunawan said.
As top holding in the Indonesia ETF (IDX, quote), Astra’s strong performance has given the broader ETF a lift over the last year.
Since the stock is so thinly traded in the United States, this is probably the best way to get exposure to the company — and by extension, Indonesia’s thriving manufacturing sector.