Australian groups hail Indonesian deregulation

Australian groups hail Indonesian deregulation

SYDNEY (Reuter): The prospect of Indonesia deregulating its
transport and retail sectors has been welcomed by Australian
transport group TNT Ltd. and wholesaler/retailer Davids Ltd.

Both Australian companies are establishing significant
operations in the distribution and retailing sectors in Indonesia
in ways which find routes through regulations restricting foreign
investment.

Erroll Graham, Davids finance director, said yesterday his
group expected the Indonesian government would introduce de-
regulations covering the company's presence in Indonesia,
possibly by establishing a new category for wholesaling.

"We expect them to (do so)," he said.

Davids holds a technical service agreement with Indonesia's
biggest supermarket group, PT Hero Supermarket. The agreement
operated as "a joint-venture of sorts", Graham said.

Davids has been in discussion with the Soeharto government on
retailing deregulation for "a good 12 months", pressing for the
creation of a separate category for wholesaling, he said.

It was still uncertain whether the Jakarta government would
introduce full deregulation for retailing, Graham said. "We were
hoping that it would be introduced by now," he said.

Deregulation of retailing was supposed to have come in the
last Indonesian government package, but didn't, he said.

Davids was helping Hero with its distribution and waiting for
deregulation changes with a view to running its own operation in
its own right, he said.

Mark Gell, TNT group relations executive, corporate
development, told Reuters that TNT had already started
warehousing and related operations in Indonesia in its joint-
venture with PT Tigaraksa Satria.

"A couple of things (remain) outstanding with the regulatory
approach," he said.

Anything which would improve the distribution of goods in
Indonesia would assist TNT's operations, he said.

Tigaraksa Satria is Indonesia's leading national distributor
of food, consumer products and related items.

TNT's joint-venture with the company technically stops short
of distribution, which legally remains closed to foreign
investment.

Comments by TNT and Davids follow the announcement of plans in
Jakarta this week by Indonesia's Coordinating Minister for
Industry and Trade Hartarto, that a major package of economic
deregulation was planned for introduction before year-end.

The package would include measures to liberalize internal
distribution of goods, he said.