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)