Astra International tops list of best companies

Astra International tops list of best companies

JAKARTA (JP): Publicly listed PT Astra International, for the
third consecutive year, topped the overall-leadership list of
companies in Indonesia, according to Far Eastern Economic Review
weekly news magazine.

In its fifth annual review of 200 leading Asian companies, the
Hong Kong-based magazine ranks PT Toyota Astra Motor after Astra
International, followed by Indofood, Indosat, Ciputra
Development, Bank Central Asia, United Tractors (another Astra
subsidiary), HM Sampoerna, Bank Bali and Freeport Indonesia.

The list was compiled from a survey of 6,000 business
executives who were asked to rank companies in Asia by five
leadership qualities: services and products, innovativeness in
responding to customers, management vision, financial soundness
and role model that other companies wanted to follow.

The report noted that Astra International made adjustments
quickly when the rupiah was floated in mid-August. The largest
Indonesian automaker adjusted its production levels and ensured
that it was not saddled with excessive inventory.

The survey commented that how Astra coped with the economic
downturn would go a long way toward determining whether the
enduring faith in its management was justified.

It quoted Astra International's president Theodore P. Rachmat
as saying that "the key is to survive in the short term and
prepare for the long term".

Rachmat said his company was paring its operating costs by,
among other things, cutting the salaries of its senior executives
by a range of 2.5 percent to 15 percent.

"My salary, for example, will be decreased by 15 percent
starting next month. There are 400 Astra executives with monthly
salaries of Rp 10 million or more who will have their pay cut,"
he added.

Rachmat foresaw vehicle sales dropping 30 percent next year
from this year's estimated 190,000 cars.

He said Astra had slashed its estimated earnings for this year
to Rp 350 billion from an earlier projection of Rp 850 billion
due to depressed domestic market demand.

But he projected that Astra's export-oriented agribusiness
division would become the largest contributor to its earnings
next year, overtaking automobiles and motorcycles which now
account for 50 percent of total revenue.

The magazine observed that tight liquidity and high interest
rates would affect the automobile industry over the next one to
two years.

But Astra, according to the survey, is not alone in facing
tough times. Indofood lost Rp 456 billion in the first nine
months of this year because of Rp 900 billion in foreign exchange
losses.

Ciputra Development is also looking at difficult times because
the company derives 80 percent of its earnings from the sale of
homes while its debt totaled Rp 1.7 trillion, including US$280
million in unhedged foreign loans, the survey said.

The report put Indosat in a brighter light because of its
dollar earnings from international telephone calls.

But the survey questioned Indosat's recent purchase of Rp 150
billion in convertible bonds issued by the money-losing TPI
television broadcasting station owned by President Soeharto's
daughter, Siti Hardiyanti Rukmana.

The report quoted some analysts as saying that the bond
transaction contradicted Indosat's goal of maximizing shareholder
value.

The survey praised Freeport's improvements in operational
efficiency and its social programs and environmental protection
efforts. (vin)