Alloy Wheel Manufacturer PRAS Teeters on the Edge as Europe's Demand Dips
Surabaya. Alloy wheel company Prima Alloy Steel Universal, listed as PRAS on the Indonesia Stock Exchange (IDX), is on the brink of bankruptcy due to a decline in demand from its primary market, Europe. This verdict was delivered by the Commercial Court at the Surabaya District Court on Feb. 29.
Following the court's ruling, the IDX has imposed a temporary trading suspension of its shares on Tuesday until further notice.
"Regarding the uncertainty about the company's business continuity, the IDX has decided to temporarily suspend the trading of PRAS shares on all markets," the IDX announced on Tuesday.
Prima Alloy's shares were suspended when its position was at Rp 97.
As of Jan. 31, Prima Alloy's shareholders included Enmaru International, holding 54.07 percent of shares, with the remaining held by the public. The company has 2,061 shareholders, and the ultimate beneficiary is businesswoman Ratnawati Sasongko, who also served as a commissioner of the company since its establishment in 1984.
Founded on February 20, 1984, in Sidoarjo, East Java, the company produces aluminum alloy racing wheels, with almost 100 percent of its production exported to Europe.
The 2022 annual report emphasized the significant impact of the energy crisis in Europe and the United States, coupled with the Russia-Ukraine conflict, on PRAS's business. The company, primarily reliant on exports, especially to Scandinavian countries like Sweden, Norway, and Finland, faced challenges due to its proximity to the conflict area. The energy crisis exacerbated the downturn in the automotive sector in Europe and the US, attributed to reduced outdoor activities and a rise in unemployment.
The company has a production capacity of 100,000 units per month, ranging from wheels with a diameter of 13 inches to 24 inches. The company's products have been exported worldwide under the trademarks Panther®, PCW®, Devino®, Akuza®, Incubus®, Ballistic®, Menzari®, Viscera®, Sothis®, Cratus®, and Bold®.
As of Sept. 30, 2023, PRAS recorded net sales of Rp 34.43 billion ($2.18 million) and a net loss of Rp 183.52 billion. From net sales, export sales were recorded at Rp 33.67 billion and local sales at Rp 766.24 million.
The company's total assets amounted to Rp 1.44 trillion, while liabilities amounted to Rp 1.19 trillion.
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