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Perhutani to lead state-owned forestry firms

Tuesday, 06 September 2011 00:00

Perhutani to lead state-owned forestry firms

The Jakarta Post, Jakarta | Tue, 09/06/2011 10:57 PM

The government says it will appoint state-owned forestry company Perum Perhutani to lead a holding company of other state-owned forestry companies.

Megananda Daryono, deputy minister for primary industry at the State-Owned Enterprises Ministry, said that Perum Perhutani would be appointed to lead the holding company as its finances were in better shape than those of the other state-owned forestry companies.

“Financial conditions at the other forestry companies are not so good,” Megananda said on Monday.

The government has six state-owned firms managing the nation’s forests, including Perhutani, which manages Java’s forests and PT Inhutani I, II, III, IV and V, which manage forests on other islands.

Megananda said that Perhutani booked more than Rp 200 billion (US$23.41 million) in profit last year, while the other firms recorded total profits of Rp 10 billion.

“Inhutani I to V have incredible potential. However, they cannot develop themselves. They are not bankable due to their financial condition,” Megananda said.

Inhutani I, for example, had potential as a door manufacturer, Megananda said. However, insufficient capital and old equipment have hindered the firm in competing with private companies.

Under the ministry’s scheme, Perhutani would operate as a holding firm. Perhutani’s excellent profit record would allow it to get bank loans, which would be channeled to the subsidiaries to develop their businesses and improve performance.

Megananda said that Perhutani would not be disadvantaged by supporting the five Inhutani firms as subsidiaries.

The finances of the other companies would be re-evaluated and early retirements offered after the holding company was established, Megananda said.

The ministry targets to establish the holding firm as soon as a holding company for state-owned plantation firms is created by the end of the year. (rcf)

http://www.thejakartapost.com/news/2011/09/06/perhutani-lead-state-owned-forestry-firms.html