Bonded zone chief shrugs off gripes
Bonded zone chief shrugs off gripes
JAKARTA (JP): State-owned PT Kawasan Berikat Nusantara (KBN)
says it is not worried by the threats of several industrial
companies that they will relocate their plants from its bonded
zone in Cakung, North Jakarta.
"They may relocate their industries to other bonded zones in
the country, but they must also remember that all other major
bonded zones are also managed by KBN," said KBN President Mursono
Siswohardjono.
Mursono was commenting on earlier news reports which quoted
the president of PT Mayatexdian, Benny Soetrisno, as saying that
Mayatexdian and several other industrial firms were planning to
move out of KBN because of what he said were inadequate
facilities, unusually high operational costs and arduous
documentation procedures.
Benny said Mayatexdian -- a garment manufacturer controlled by
the Bimantara group -- would be relocated later this year to a
bonded zone owned and developed by PT Lamicitra in Semarang,
Central Java.
According to Benny, other companies which also plan to
relocate their industries are PT Rapmahita Mangultua and PT Colon
International (garments), PT Daewa Vinyl (plastic flooring) and
PT Kaltimex Namsung (shoes).
Benny said the bonded zone in Semarang guaranteed cheaper
labor, better infrastructure -- including water, electricity and
factory buildings -- and more favorable cargo-handling
procedures. He said that this was due, among other things, to the
shorter distance between the bonded area and Semarang's Tanjung
Mas port.
Benny complained that the condition of the factory buildings
occupied by Mayatexdian's garment plants in Cakung was rundown
and unfit to meet the industry's demand for more modern
facilities.
Mursono, who was accompanied by the company's directors,
denied the accusations, arguing that "KBN should not be blamed
for a poor business performance which actually was caused by a
company's own incompetence".
"The garment industry is currently in a unpleasant state. If
(garment) exports are declining due to unfavorable market
conditions or poor management, they shouldn't blame us for it,"
Mursono said.
Mayatexdian executives were unavailable for comment yesterday.
Directory
According to the 1994 Indonesian Capital Market Directory,
Mayatexdian's total assets increased from Rp 179.2 billion in
1991 to Rp 208.9 billion in 1992 and Rp 212.5 billion in 1993.
Its after tax profits in 1991 were Rp 3.06 billion but dropped
in 1992 to Rp 1.06 billion and in 1993 it lost 9.8 billion.
Mayatexdian was acquired by a consortium led by the Bimantara
group last year.
Mursono said that the rental rates charged by KBN, which are
presently US$1.65 per square meter per month for factory space
and $3 per square meter per year for land, were "very cheap".
"But when companies can't meet their export targets and the
ratio between rental rates and exports go up, even such low
rentals can be felt to be expensive," he said, adding that in the
bonded zone, "successful companies" had a rent to export ratio of
about 1.5 percent.
Mursono said that if the companies decided to relocate their
operations, the move would pave the way for KBN to wholly
renovate the old buildings in the area and bring them up to
modern standards, instead of making patchwork repairs.
"Actually, we can easily negotiate for the movement of the
industrial activities temporarily to a new building to make way
for our renovation work," Mursono said.
A number of "successful companies" in the area, he said, had
no objection to such a scheme and they were even willing to pay
higher rental fees after the renovations.
Responding to Benny's complaints about an 0.3 percent
management fee applied to the value of exports (free-on-board),
Mursono said that, since last May, the fee in question had not
been charged.
"We have managed to improve efficiency...Therefore we can
waive the fees, which can reach a level of Rp 7.5 billion (US$3.4
million) a year," he said.
The volume of paperwork which had to be administered by KBN,
Mursono said, was also small and could be completed in a single
day.
"Thus, KBN should not be blamed for prolonged documentation
procedures," he said.
Benny said that document procedures at KBN often took up to
two weeks and caused serious losses to manufacturers, which were
constantly under pressures to meet their importers' deadlines.
Mursono said that since August 1993, a lot of the paperwork
which had once been KBN's responsibility, was now being handled
by other offices, particularly the customs service.
Poor electricity and water facilities, which Benny also
complained about, were now "better", Mursono said.
"Several months ago, tap water might stop running, but it
would last only for two or three hours. As for electricity, it is
totally beyond our control because it is managed by the state
electricity company," he said.
KBN's bonded zone in Cakung covers 173 hectares. The area is
currently occupied by 108 foreign and domestic companies, 63 of
which are in the garment industry.
According to Mursono, seven companies -- involved in various
fields -- have expressed an intention either to expand their
operations or to establish new industries in the area. (pwn)