Ailing plantation firms face two-year deadline

Ailing plantation firms face two-year deadline

JAKARTA (JP): Ministry of Forestry and Plantations Sumahadi
said yesterday that poorly managed state plantation firms would
be given two years to improve their performance or face merger or
liquidation.

"All state plantation and timber companies have to make a
profit even though they perform special tasks for the
government", he said after a meeting with forest concession
holders and directors of state plantation companies.

There are currently 14 state plantation companies, PT
Perkebunan Nusantara (PTPN) I through to XIV, which grow and
produce various commodities, including palm oil, tea, rubber,
sugarcane and coffee.

Four state plantation companies are considered to be poorly
performing and the other 10 are considered relatively sound. Two
companies will be ready for floatation on the stock exchange
later this year.

Sumahadi said the Ministry of Forestry and Plantations and the
State Minister for the Empowerment of State Enterprises would
jointly prepare the listing.

He decline to reveal which companies he was referring to.

But Sumahadi said it was impossible to sell state forestry
company shares to the public because their main assets, the
forest areas which they hold a license to exploit, belonged to
the government.

He said issuing state timber company shares to the public
might force the companies to focus only on profit oriented
activities and ignore their duty to manage forests in a
sustainable manner.

The Ministry of Forestry and Plantations controls six timber
companies, PT Inhutani I to V and Perum Perhutani.

PT Inhutani I to V oversee forests in Sumatra, Kalimantan,
Sulawesi and Maluku, while Perum Perhutani manages forests in
Java, West and East Nusa Tenggara.

Sumahadi said that PT Inhutani I to V were performing well,
and Perum Perhutani was performing very well.

Unlike the other five companies, which are limited liability
ventures, Perum Perhutani still conducts several non-profit
activities.

Sumahadi said the ministry is considering changing the status
of one of the five limited liability timber companies to allow it
to perform special tasks, like Perum Perhutani.

He said the change would help the timber company to improve
the prosperity of villagers living on forest fringes and protect
environment. (gis)