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)