Motorbike Retailer Builds Blend Plant

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Indonesian motorcycle retailer PT Mitra Pinasthika Mulia plans to use proceeds from a recent stock offering to build a new blending plant for its lubricant arm. Lubricant maker PT Federal Karyatama should be able to open the facility by early 2017, officials said.

Jakarta-based Mulia started as a distributor of Honda motorcycles but has expanded into motorcycle retailing, as well as auto rentals and financing and insurance. Subsidiary PT Federal Karyatama has a blending plant in Jakarta that makes motorcycle oils marketed under Mulias Federal Oils brand. The plant also toll-blends lubricants for other marketers.

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Officials said the existing plant is inefficient, which is why the company has decided to build a new one. The company conducted a stock offering last year and announced this month that it will spend 275 billion rupiah (U.S. $22.6 million) from the proceeds to build the blending plant. The company is still working on designs and has not disclosed the capacity, but construction is scheduled to begin in mid-2014 and could take up to two and a half years.

Indonesia has the worlds fourth-largest motorcycle population.