Shipyard PAL plans to go public next year<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
State-owned shipyard PT PAL Indonesia plans to offer its
\nshares to the public through an initial public offering (IPO)
\nscheme next year in a bid to raise working capital and help the
\ncompany improve competitiveness in the Asia-Pacific region.<\/p>\n
PAL's director of shipbuilding M. Moenir told The Jakarta Post
\non Monday that the company was considering going public after the
\n2004 general election.<\/p>\n
\"Yes, we will have an IPO soon. It may be conducted after the
\ngeneral election,\" said Moenir without elaborating.<\/p>\n
If the IPO plan materializes, PAL will be the first
\nshipbuilding company in the country to be listed on the stock
\nexchange.<\/p>\n
To support its IPO plan PAL revealed its 2002 audited
\nfinancial report to the public in a press briefing on Monday.<\/p>\n
The company, with current assets reaching around Rp 1.8
\ntrillion (US$219 million), booked a decline in sales to Rp 906
\nbillion from Rp 1.09 trillion in 2001.<\/p>\n
However, the company's net profit in 2002 skyrocketed by more
\nthan 600 percent to Rp 331 billion from Rp 57 billion in the
\nprevious year.<\/p>\n
The rise in the net profit was mostly caused by the successful
\ndebt restructuring program in 2001 worth Rp 379 billion, and the
\ndecline in delivery time penalties.<\/p>\n
With the net profit, PAL, which was once fully controlled by
\nthe navy, managed to give out dividends reaching Rp 20 billion
\nthis year to the government.<\/p>\n
In 2002, the company received 17 orders worth over US$150
\nmillion.<\/p>\n
In the press briefing, the company projected a rise in 2003's
\nnet profit by around 10 percent to 15 percent, mainly from the
\norders of 20 ships from the government and from other countries.<\/p>\n
Currently, PAL controls around 60 percent of the country's
\nshipbuilding market.<\/p>\n
State-owned companies which are not listed on the stock
\nexchange usually refuse to make their financial reports available
\nto the public, making the companies difficult to be supervised by
\nthe public.<\/p>\n
On the sidelines of the briefing, PAL president Adwin H.
\nSuryohadiprojo expressed concern over the government's
\nunfavorable policies, including excessive taxes imposed during
\nthe making and selling of ships by local shipyards, and the
\nabsence of a special credit facility for ship operators to
\npurchase ships.<\/p>\n
All the taxes, said Adwin, had raised the prices of ships
\nwhich in turn undermined orders from local shipping and fishing
\ncompanies.<\/p>\n
Currently, 70 percent of raw materials needed to make ships
\nare imported and subjected to import taxes of between 5 percent
\nand 15 percent.<\/p>\n
Once the construction is concluded, the ships will be subject
\nto a 10 percent value-added tax if purchased by local companies.<\/p>\n
As a result the ships will cost 30 percent more than imported
\nones.<\/p>\n
Although 73 percent of the Indonesian territory is water, the
\nshipbuilding industry in the country has long been mismanaged by
\nthe government.<\/p>",
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"sponsor": "Okusi Associates",
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