Djajanti breaks East Indonesia's isolation<\/p>\n
By Johannes Simbolon<\/p>\n
JAKARTA (JP): When fishing and forestry company Djajanti Group
\nstarted its fishery project in 1995 in Wanam, Kimaam district,
\nMerauke regency -- a remote and isolated village on the Southern
\ncoast of Papua -- the area lacked everything necessary for
\nbusiness including infrastructure, clean water, power supplies,
\nskilled human resources and a modern economic system.<\/p>\n
Moreover, the Papuans living in the area, hunting for a living
\nand engaging in a barter economy, were often involved in tribal
\nwarfare.<\/p>\n
\"What made us determined to invest here is the fact that this
\narea abounds with fish. The (expensive) arawana aquarium fish,
\nfor instance, is very easy to find here. You simply go to a
\nditch, take a cup of water and you'll see the fish in your cup,\"
\nsaid Vinsentius Hendra, general manager of Djajanti's subsidiary
\nDjarmu Aru, who spoke with reporters in Wanam last week.<\/p>\n
The village is now home to a sophisticated fish processing
\nplant with more than 5,000 workers and an output of more than 150
\ntons of shrimp and fish per day and 250 tons of fishmeal per day.<\/p>\n
The fish are shipped to export markets; the fishmeal is for
\nthe domestic market.<\/p>\n
The fish processing site is equipped with, among other things,
\nreservoir and water treatment facilities to process the area's
\nwater into clean and potable water, a modern health clinic, a 2-
\nMegawatt power generator, a roughly 4,000-square meter dockyard,
\nand an airport with an 1,800-meter runway.<\/p>\n
\"Of the trillions of rupiah we invested in the project, 80
\npercent was spent for on infrastructure. We did not receive any
\nfacilities or tax holidays from the government,\" Vinsentius said.<\/p>\n
The local Papuan people have gradually begun to engage
\nthemselves in the modern economic system with some of them
\nturning to agriculture, planting vegetables for the company-run
\nsupermarket, and becoming fishermen themselves using boats
\nprovided by the company.<\/p>\n
The company leases the vessels on a production sharing basis
\nto enable the people to buy the boats in affordable installments.<\/p>\n
\"When we started our project five years ago, the Papuans
\nmostly preferred barter transactions. They sometimes accepted
\nbank notes, but only the red-colored Rp 100 bank notes. They
\nrejected other bank notes despite their higher value.<\/p>\n
\"Now, they know the true value of all bank notes and have done
\nwell in learning price negotiation techniques,\" a Djarmu Aru
\nworker said.<\/p>\n
Of the more than 5,000 workers in the company, only between 20
\nto 30 percent are Papuans.<\/p>\n
\"It's still difficult for the local people to adjust
\nthemselves to a regular and permanent job. I think it takes time
\nfor them to learn,\" said Visentius, an ethnic Chinese Indonesian.<\/p>\n
Djajanti bought the land for its fishery plant from the Papuan
\ncommunity for Rp 100 million plus two tree-cutting machines and
\ntwo fishing boats. The compensation was set by the Papuans
\nthemselves in negotiations with Djajanti.<\/p>\n
East Indonesia<\/p>\n
The Wanam project best illustrates the strong commitment of
\nDjajanti Group to investing in the eastern part of Indonesia, an
\narea neglected by former President Soeharto's 32-year regime in
\nits development programs.<\/p>\n
Djajanti is in fact the only national conglomerate very active
\nin the Eastern part of Indonesia. Most national conglomerates
\nhave been focused on Java and other islands in West Indonesia
\nwhich have better infrastructure, skilled human resources, and
\nother prerequisites for investment.<\/p>\n
The group, controlled by an Indonesian of Chinese origin,
\nBurhan Uray, began its business in the region in 1978 with a
\nsubsidiary, PT Daya Guna Samudra, which ran a small fish
\nprocessing plant in Benjina on Maekor island, part of the Aru
\nislands, Maluku.<\/p>\n
Company operations director Hadi Budoyo said Benjina, which
\nthen had only around 200 fishing families, has now developed into
\na home base for a major fishing industry with more than five
\nthousand workers and an airport with a 1,300-meter runway.<\/p>\n
\"Pak Burhan, who was then only active in logging business in
\nKalimantan, began paying attention to this area after repeatedly
\nhearing reports of foreign vessels illegally fishing in these
\nwaters,\" Hadi said.<\/p>\n
Now, 22 years after entering the region, Hadi said, Djajanti
\nhas eight fishing companies in Maluku and Papua provinces.<\/p>\n
The eight companies include five companies located in Maluku,
\nnamely PT Daya Guna Samudra in Benjina; PT Mina Seram Lestari in
\nArara village, Wahai district, Central Maluku regency; PT Wana
\nEka Sari in Wahai's Pasari village; PT Seram Nusa Windu in
\nWahai's Pamali village, and PT Hasil Tambak Amboina in Wahai's
\nOpin village.<\/p>\n
The three other companies are located in Papua, namely
\npublicly-listed PT Bintuni Mina Raya in Wimro, Babo district,
\nManokwari regency; PT Biak Minajaya in Biak regency's capital of
\nBiak, and Djarmu Aru in Wanam.<\/p>\n
The companies have an investment of US$2 billion in their
\nenterprises, employ a total of 50,100 workers and operate a 660-
\nstrong armada of fishing vessels, Hadi said.<\/p>\n
The fish processing plants owned by the companies, except for
\nBiak Minajaya, are located in remote places where boats and
\naircraft are the only means of access and transport.<\/p>\n
Djajanti built their own airports as in the cases of Benjina
\nand Wanam, or rehabilitated airports built by the Japanese during
\nthe Second World War.<\/p>\n
\"Most people are not interested in investing in this area due
\nto its remoteness and the lack of infrastructure. But we did it
\nwithout any facilities from the government,\" Hadi said.<\/p>\n
Except for Biak Minajaya, where 90 percent of the 4,300-strong
\nworkforce are Papuans, all the companies are dominated by workers
\nfrom Java and South Sulawesi. The latter are known for their
\nremarkable fishing skill.<\/p>\n
\"It's a process. Our dream is that all the companies will be
\nwholly run by the local people. But at present, most of them,
\nespecially those in remote areas, are not yet used to regular and
\npermanent jobs,\" Hadi said, calling on the educated Papuans in
\nJakarta to return to build their homeland together with Djajanti
\nGroup.<\/p>\n
The Papuans are apparently happy with Djajanti's operations.<\/p>\n
\"Djajanti Group and Burhan Uray belong to Papuans. Throughout
\nthe New Order era, none of the national conglomerates who enjoyed
\na variety of facilities from the government would invest in the
\nland of Papua for various reasons.<\/p>\n
\"But, Djajanti Group, which has never received facilities from
\nthe government, made a breakthrough by investing in Papua in the
\n1970s,\" said Nehemia Wospakrik, human resources general manager
\nof Biak Minajaya.<\/p>\n
Nehemia, a former university lecturer in Jakarta who claims to
\nhave been strongly persuaded by Djajanti to take a job in Biak
\nMinajaya, blasted the government for neglecting Papua in its
\ndevelopment programs.<\/p>\n
Disaster<\/p>\n
The current social and political upheaval in Maluku and Papua
\nhas brought disaster to Djajanti.<\/p>\n
Djajanti's marketing director Joseph Siswanto said the one-
\nyear-long bloody communal violence that claimed thousands of
\nlives in Maluku, and the intensifying campaigns of the free-Papua
\nmovement in Papua have much affected the company's operations.<\/p>\n
Joseph said Djajanti closed its Maluku regional headquarters
\nin Ambon for security concerns, while its logistics office in
\nTual recently ceased operations for the same reason.<\/p>\n
Production, however, still continues as the operational sites
\nare located in areas well protected from the repercussions of
\ncommunal unrest, but continues only at diminished levels. Fifty
\npercent of the company's workers from Java and South Sulawesi
\nhave fled the region due to the unrest.<\/p>\n
The company recorded US$194 million in sales in the first nine
\nmonths of last year, a sharp decrease from US$305 million in
\n1998.<\/p>\n
Joseph said that this year the company expects its sales to
\nreach 1999 levels provided that the social and political
\nconditions in the region do not worsen.<\/p>\n
\"We are safe from the impact of the downfall of Soeharto since
\nwe are not one of his cronies. But the value of our shares has
\ndropped because of the social unrest in the region,\" Joseph said.<\/p>\n
Joseph also said Djajanti was facing a debt problem following
\nthe sharp downfall of the rupiah against the dollar in mid-1997.<\/p>\n
The group is the ninth largest obligor of the Indonesian Bank
\nRestructuring Agency (IBRA) with a total debt of Rp 2.6 trillion
\nplus US$24 million.<\/p>\n
Joseph said the debt was owed to Bank Dagang Negara by one of
\nDjajanti's forestry units. Aside from fishing companies, Djajanti
\nalso holds forest concessions in the eastern part of Indonesia.<\/p>\n
The debt originally amounted Rp 600 billion but suddenly rose
\nto Rp 2.4 trillion amid the monetary crisis because Djajanti had
\nswitched the debt from rupiah to dollars prior to the crisis,
\nlured by the low interest of the dollar loans.<\/p>\n
\"We are open to any solutions offered by IBRA. But whatever
\nthe solution, it should not ruin the business that has proved
\nprofit-making and brought benefits to the local people,\" Joseph
\nsaid.<\/p>",
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