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)