IPTN to remain in the red in 1998: Ilham Habibie<\/p>\n
JAKARTA (JP): The state-owned aircraft maker PT Industri
\nPesawat Terbang Nusantara (IPTN) would continue to be in the red
\nin 1998 due to the current economic crisis, director Ilham
\nHabibie said on Friday.<\/p>\n
Ilham said that the crisis had dealt a big blow to the
\nindustry as its market contracted considerably particularly due
\nto the plunging purchasing power of both the government and the
\nbusiness sector.<\/p>\n
\"Some of our foreign customers in Malaysia, Thailand and South
\nKorea have also been affected,\" he told press on the sidelines of
\na seminar on infrastructure.<\/p>\n
He also conceded that IPTN suffered a financial loss in 1997,
\nbut declined to disclose the figure.<\/p>\n
\"It's still being audited, and besides I have to get
\nshareholders' permission to announce it,\" said the eldest son of
\nPresident B.J. Habibie.<\/p>\n
IPTN, which was established by the senior Habibie 23 years
\nago, has never made a profit. It has often been criticized by
\nmany economists as an unrealistic project that only depletes
\nstate resources. In a January agreement with the IMF the
\ngovernment had ceased budgetary support for the company.<\/p>\n
IPTN reported a 1996 loss of Rp 153.83 billion.<\/p>\n
Muhammad Faisal, a director of PT Pakarya Industri, a holding
\ncompany established in August this year for 10 strategic state-
\nowned industries including IPTN, said during a press conference
\nthat it would take more than five years to turn around the ailing
\nIPTN and this would be done particularly by boosting the
\ncompany's profit centers such as the aircraft engine maintenance
\nunit.<\/p>\n
Ilham is counting on the company's restructuring program,
\nwhich will start in the first quarter of next year, to turn
\naround the ailing industry.<\/p>\n
\"This will include business reorientation, capital
\nrestructuring, and employee restructuring,\" he said.<\/p>\n
He declined to provide details as the plans had yet to be
\nfinalized.<\/p>\n
He explained, however, that through the restructuring
\nmeasures, IPTN's business units would be given more flexibility
\nin getting private partners.<\/p>\n
Many foreign investors were very keen to enter into certain
\nbusiness units of the company, Ilham claimed.<\/p>\n
He said, however, that securing new investment partners was
\ndifficult in the current sluggish business environment.<\/p>\n
\"The investment mood in the world is currently a bit negative.
\nPeople are being careful... there is recession everywhere... in
\nRussia, Latin America, and Asia,\" he pointed out.<\/p>\n
He admitted that in the case of Indonesia, the investment
\nclimate was affected by political uncertainty.<\/p>\n
\"It's clear that there is uncertainty. But it's only
\ntemporary.... And the reward is far greater than the risk,\" he
\nsaid, pointing out the huge market potential offered by the vast
\narchipelago populated by more than 200 million people.<\/p>\n
Ilham explained that there would be a place for the aerospace
\nindustry in the future of Indonesia because it would be difficult
\nto imagine the vast archipelago without airplanes.<\/p>\n
\"I think foreign investors are still interested because they
\nsee the huge potential here,\" he said.<\/p>\n
Ilham also said that the company was in the process of
\ncontract finalization with buyers from the United Arab Emirates
\nwho want to acquire four IPTN aircraft. (rei)<\/p>",
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