Distribution center set up to ease stockpile

JAKARTA (JP): The government has announced that it will set up a distribution center to ease the backlog of undistributed goods which has built up following last months riots.

The center, to be established and run by the Ministry of Trade and Industry, will ensure that basic supplies reach retail outlets.

The planned establishment of a distribution center was announced by Minister of Industry and Trade Rahardi Ramelan during a hearing at the House of representatives last Wednesday.

"Distribution is spearheaded by retailers. The riots therefore damaged our distribution network," he told members of House Commission V for industry at the Wednesday hearing.

Rahardi said the ministry would use warehouses belonging to the State Logistics Agency (Bulog) to store supplies, and would charge state-owned trading firms with running the center.

Multinational producers of consumer goods such as Unilever and Proctor and Gamble agreed to distribute their products through the center when they met with the minister on Friday.

Others companies, including shoe producer PT Sepatu Bata, retailer ALatief Corp and some textile companies, also expressed their readiness to cooperate with the center during the Friday meeting.

"The companies are ready to supply their products to the distribution center, which will sell the goods to retailers," Sujata, director general of farm and forestry products in the ministry, told reporters after the meeting on Friday.

Sujata said the distribution center would mend links between producers and retailers which were severed during last-month's riots.

It would also lead to lower prices, he said, because it would simplify the process of distributing goods.

Currently supplies go from main distributors to distributors to sub-distributors, agents and then retailers.

During the riots, many shops and distribution outlets belonging to Chinese-Indonesians were looted and burned. Chinese- Indonesians control the larger part of the country's retail and distribution sector.

In the Greater Jakarta area, losses resulting from damaged property were placed in the region of Rp 2.5 trillion.

The riots led to a mass exodus of tens of thousands of Chinese-Indonesians, some of whom were too traumatized to contemplate returning to the country to rebuild their businesses.

Since the riots, the distribution of goods has been restrained. Some agents have held goods in their warehouses because of fears of further unrest.

President of PT Unilever Indonesia Sri Urip said on Friday that current problems in the trading of consumer goods were the result of damage inflicted on the distribution system and the lack of security guarantees.

"We have discussed how best to continue our operations with the minister, and we are also going to talk about the problems with the President because we have been working here for over 60 years," Sri said after the meeting.

"We are concerned that the there is no security guarantee," she said, adding that security did not mean being "guarded all the time" but a guarantee of complete national safety. (das)