BAT backs worker cooperatives
BAT backs worker cooperatives
JAKARTA (JP): PT BAT Kareb, a joint venture between PT BAT
Indonesia -- a major Indonesian cigarette producer -- and Kareb, a
cooperative of workers in Bojonegoro, East Java, has proven that
a partnership between a multinational company and a local
cooperative can be a mutually beneficial relationship.
"Many multinationals are reluctant to foster relationships
with cooperatives because they assume local cooperatives lack the
professionalism and capability to manage large-scale businesses,"
BAT Indonesia said in a statement on the development of the joint
venture near Surakarta, Central Java.
During a visit to the BAT Kareb threshing facility on Friday,
BAT Indonesia president Mark Jennings said BAT Kareb proved this
assumption was incorrect.
BAT Kareb, which is a tobacco processor, was founded in 1995.
The partnership, however, does not simply encompass supplying
tobacco to cigarette producers; BAT Indonesia and Kareb also
formed a limited liability company which generates proportional
profits for both parties, BAT Indonesia said.
"The joint venture has gained steady growth of over 23 percent
in revenue and almost doubled its production output," Jennings
said during a meeting with the cooperative's employees.
BAT Indonesia said the joint venture's production over the
past three years increased from 2,595 tons of tobacco in 1996 to
4,440 tons in 1998.
BAT Indonesia and Kareb are equally represented on the board
of directors of the joint venture, with each contributing half of
the members, the statement added.
"In this partnership, both parties are equal partners, so
neither party controls or is controlled by the other," Jennings
said.
BAT Indonesia holds 70 percent of the shares in the joint
venture, while Kareb holds the remaining 30 percent.
Jennings said BAT Indonesia helped transfer technology and
management know-how to the cooperative.
The partnership, in return, provides BAT Indonesia with
access to a threshing facility and a continuous supply of quality
tobacco which meets the company's standards, he said.
Besides providing services for BAT Indonesia, Kareb also works
with other cigarette manufacturers.
The joint venture's assets amounted to Rp 14 billion,
including a 6,830-square meter factory, two 5,264-square meter
warehouses and a tobacco processing facility.
BAT Indonesia, established in 1917, was listed on the Jakarta
Stock Exchange in 1979. The company is now a leading cigarette
producer with a number of familiar international and local
brands, including Lucky Strike, State Express 555, Kent, Benson &
Hedges, Ardath, Commodores and Escort. (02)