Tambang Timah to establish subsidiaries<\/p>\n
JAKARTA (JP): State-owned mining company PT Tambang Timah,
\nlisted on the Jakarta and London Stock Exchanges, will soon set
\nup three subsidiaries to accelerate its expansion and growth.<\/p>\n
\"Initially, we will establish PT Perusahaan Investasi, an
\ninvestment company that will coordinate our subsidiaries,\"
\nTambang Timah's president, Erry Riyana Hardjapamekas, said after
\nan extraordinary meeting of the company's shareholders yesterday.<\/p>\n
Erry said that Perusahaan Investasi will be 99.9 percent owned
\nby Tambang Timah and 0.1 percent by Koperasi Mitra Mandiri,
\nTambang Timah's employee cooperative.<\/p>\n
The other two subsidiaries to be established are PT Kawasan
\nIndustri Bangka (Bangka Industrial Estate) and PT Timah
\nEngineering Company.<\/p>\n
He said that Bangka Industrial Estate will cooperate with the
\nSociedad para la Promocion Reconversion Industrial of Spain to
\ndevelop an industrial estate on Bangka Island in South Sumatra.<\/p>\n
Most of the company's tin mines are on Bangka, where it is
\nheadquartered.<\/p>\n
Tambang Timah and the Spanish firm have also agreed to examine
\nthe possibility of jointly setting up a power plant to support
\nthe industrial estate.<\/p>\n
Timah Engineering, which will be jointly established with
\nseveral domestic and foreign companies, will become a service
\ncompany to enhance the utilization of Tambang Timah's workshops,
\ndockyards and infrastructures, which have not been operated
\nefficiently.<\/p>\n
Erry stressed that the establishment of the subsidiaries is
\naimed at minimizing his company's costs and maximizing the
\nutilization of its assets in earning more income.<\/p>\n
\"The assets which have not yet been fully utilized in our tin
\nmining operations will be jointly operated with other parties to
\nmaximize their utilization. We'll make the assets as our profit
\ncenters instead of cost centers, as they are now,\" he said.<\/p>\n
According to Erry, Tambang Timah's main strategy in the short
\nand medium terms is to continue its core business -- tin mining
\n-- by increasing production to expand its share on the world
\nmarket and to reduce production costs.<\/p>\n
\"In the long term, we will seek opportunities for
\ndiversification, which will be financed with our cash surplus and
\nadditional borrowing funds, if necessary,\" he noted.<\/p>\n
He said that in the long term, Tambang Timah cannot rely on
\nits single commodity, tin. \"We need diversification to secure our
\nlong-term growth,\" he said, adding that the company's tin mining
\noperations will last for 10 years.<\/p>\n
\"The diversification will be in the form of greenfield
\nexplorations, joint ventures with either local or foreign
\ncompanies in the mining businesses and acquisition of existing
\nmining companies,\" he said.<\/p>\n
By the year 2000, Tambang Timah will also produce gold and
\ncoal, he said.<\/p>\n
Erry said that yesterday's extraordinary meeting approved the
\ncompany's plan to set up a joint venture with Phelps Dodge
\nIndonesia Corp. of the United States for gold exploration in Aceh
\nprovince. The two companies signed on April 16 a memorandum of
\nunderstanding on the joint venture establishment.<\/p>\n
He said that his company will have a 25 percent stake and
\nPhelps a 75 percent stake in the planned joint venture, which
\nwill be capitalized at US$8.5 million.<\/p>\n
Erry said that Tambang Timah will also cooperate with the
\nstate-owned general mining company PT Aneka Tambang to explore
\nfor gold and diamonds in the latter's concession areas in
\nKalimantan.<\/p>\n
Tambang Timah, which reported an 11.8 percent increase in its
\nnet profit to Rp 134.5 billion ($58.14 million) last year due
\nmainly to a significant rise in prices, will raise its tin
\nproduction to 41,500 tons this year from last year's 37,416 tons.
\nBy 1999, production is likely to reach 50,000 tons.<\/p>\n
During the first quarter of this year, the company's profits
\njumped by 91 percent to Rp 39.4 billion from Rp 20.6 billion in
\nthe same period of last year.<\/p>\n
Erry predicted that tin prices will continue to fluctuate this
\nyear, but they may average at $6,300 per ton. (13)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/tambang-timah-to-establish-subsidiaries-1447893297",
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