Dharmindo to shift core business into trade, construction<\/p>\n
JAKARTA (JP): PT Dharmindo Adhiduta, a mining company affected
\nby poor performance in 1993, will shift its core business into
\ntrade and construction and will consolidate three of its
\nsubsidiaries by next year.<\/p>\n
\"We will turn our business from general mining towards the
\ntrade of heavy equipment and building materials and the
\nconstruction of infrastructure,\" the company's president,
\nBoedijanto, told reporters in a press conference here yesterday.<\/p>\n
He said three of the company's subsidiaries have been
\nappointed to handle the new businesses.<\/p>\n
Dharmindo is listed on both the Jakarta and Surabaya stock
\nexchanges.<\/p>\n
Boedijanto explained that PT Mekasindo Dharma International,
\none of the subsidiaries, will handle the trade of heavy
\nequipment, PT Jaindo Metal Industries the trade of roof and metal
\nproducts and PT Indoprima Alam Marmer Industries the trade of
\nmarble products.<\/p>\n
Dharmindo is still in the preparatory stages of establishing
\nan infrastructure construction company, he said.<\/p>\n
He said that the reason for converting the company's core
\nbusiness was to improve the company's performance, as they could
\nno longer cope with the mining business.<\/p>\n
Risks<\/p>\n
Boedijanto said mining is a business that requires a massive
\ninvestment and always faces a high risk of failure.<\/p>\n
A company will need to invest a minimum of Rp 26 billion
\n(US$11.98 million) to enter a mining business, which is full of
\nuncertainty on the investment recovery even after the results of
\nsurveys show a discovery of mining reserves, he said.<\/p>\n
\"Moreover, we were facing a lack of experienced workers in the
\nfield of mining,\" he added.<\/p>\n
Boedijanto said Dharmindo will also reduce its investments in
\nits affiliates -- Independent Resources Pte. Ltd, Southern
\nNevaria Pte. Ltd. and Woyla Alluvial-Mining Pte. Ltd.<\/p>\n
He said the funds to be generated from the sale of shares in
\nthe three affiliates will be used to finance the company's
\nexpansion program and to repay its debts. He declined to specify
\nthe estimate of the funds expected from the share sales.<\/p>\n
Dharmindo's financial advisor, Daniel Kong, said that last
\nyear the company suffered a 43.8-percent decrease in its after-
\ntax profit because it terminated three contracts on unproductive
\nmining projects in Sentani of Irian Jaya and in Aceh.<\/p>\n
He said the contract termination has cost the company Rp 8
\nbillion.<\/p>\n
Daniel said the company's after-tax profit dropped to Rp 270
\nmillion last year from Rp 481 million in 1992.(02)<\/p>",
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