AOI fails to obtain recommendation to 'go public'

JAKARTA (JP): Minister of Forestry Djamaloedin Soeryohadikoesoemo has said in no uncertain terms that he can not recommend that PT Artika Optima Inti (AOI), a manufacturer of wood panels, be allowed to list itself on the capital market.

After hearing the company's presentation on Tuesday, Djamaloedin said he could not recommend them because of a number of persistent problems with the firm, making AOI the first forestry firm not to receive his seal of approval.

PT Barito Pacific Timber and its subsidiary PT Sumalindo Lestari Jaya are the only timber firms listed on the exchange.

According to the minister, AOI, which belongs to the Djajanti Group and is fed by an Irian Jaya forest concession, has not built a wood processing unit on Irian, which was a condition placed by local authorities when the concession was granted. AOI wants to take the raw timber to Maluku for its value added work.

Djamaloedin said he also has doubts as to where the company's processing unit in Seram, Maluku, will get enough wood, as the capacity of the facility is greater than sustainable harvesting of its Irian concession will allow.

AOI's plywood manufacturing plant in Maluku can process 612,000 cubic meters of logs a year, with its accompanying sawmill consuming another 442,000 cubic meters, he said.

AOI insist that their sawmill can be run profitably at 180,000 cubic meters.

Djamaloedin explained that AOI's Irian concession has a total capacity of 679,500 cubic meters per year.

Adding to the problem, he said that the Djajanti Group also has a plywood manufacturing plant, operated by PT Nusantara Plywood (NP), in Surabaya, which needs 650,000 cubic meters of logs per year.

Since that company's concession area in Kalimantan has an annual production capacity of only 350,000 cubic meters of logs, it would have to take the remaining 300,000 cubic meters from the AOI concession, assuming the wood is procured legally.

Management

"I have not even reached the point of questioning them on their forest management," Djamaloedin said, as quoted by the Antara news agency.

He added that he would immediately inform the Capital Market Supervisory Agency (Bapepam) of his decision.

Adding insult to injury, AOI made public presentations on its plan to sell shares in Jakarta and abroad earlier this month, in contravention of government regulations.

Djamaloedin pointed out that the rules require a presentation be made to his ministry before making any public presentations.

According to the company, it had hoped to raise about Rp 400 billion to Rp 500 billion from the offering originally scheduled for May 18 through May 20 and to list the shares on the Jakarta and Surabaya Stock Exchanges on June 22. (10)