Djajanti awaits minister's reference for share offering

JAKARTA (JP): Minister of Forestry Djamaloedin Soeryohadikoesoemo reiterated yesterday that he has yet to issue a recommendation for PT Artika Optima Inti to go public.

"I have been given additional reports on various aspects of their forest management," Djamaloedin told newsmen.

PT Artika, a wood-based panel board manufacturer on Seram Island, Maluku, which is a subsidiary of the widely diversified Djajanti Group, originally scheduled its initial public offering of 66 million shares -- or 30 percent of its enlarged common stocks -- during the third week of May and planned to list those shares on the stock exchanges on June 22.

But those plans have been delayed due to the absence of a recommendation from the forestry ministry to the Capital Market Supervisory Agency (Bapepam).

Djamaloedin and PT Artika still had conflicting views about the capacity of the company's forest concessions and some other requirements on its forest management.

Djamaloedin said the recommendation to go public will be given to PT Artika after an independent appraisal agency has audited the company's forest concessions.

He said it would be better to appoint an independent body, such as the one dealing with ecolabelling, to conduct an independent survey on Artika's concessions.

PT Artika's management conducted roadshows in several cities such as Singapore, Hong Kong, Tokyo, New York, San Francisco, London, Paris, Zurich, Rotterdam and Geneva in April, which attracted great interest in the company's share offering among foreign fund managers.

Djajanti, established in 1956 in Banjarmasin, East Kalimantan, and controlled by Burhan Uray and family, is one of the leading conglomerates in Indonesia.

According to its annual report, Djajanti had total assets of US$530 million with annual turnovers exceeding US$370 million.

Djajanti has two plywood factories on Seram Island and in Gresik, East Java, respectively, and owns large stakes in fisheries, plantations, fishing ship building and several other businesses.

The group has 26 forest concessions with over 3.5 million hectares in Kalimantan, Irian Jaya, Maluku, Sumatera and Sulawesi. Of the total, 15 concessions with 2.2 million hectares are affiliated with PT Artika.

Securities analysts who followed the "tug-of-war" between the Djajanti Group and the forestry minister noted that the requirement imposed on PT Artika to build an integrated wood industry in Irian Jaya seemed too tough and discriminative in nature.

They recalled that PT Sumalindo Lestari Jaya and PT Barito Pacific, which also manage large forest concessions in Irian Jaya, had been given recommendations to go public even though they had not set up any wood processing plants in that province.

They also wondered why the forestry ministry did not take into account the Djajanti Group's records of about 30 years in forest management and its pioneering development efforts in the country's least-developed eastern provinces.

"The fact that the company's annual tree harvest plan has always been approved by the forestry ministry should have proved that Djajanti's performance was not so poor as to make it unqualified for a recommendation to go public," noted a securities analyst, who claimed to have received many inquiries from foreign investors about the Artika share offering.

An executive of PT Artika said his company has set up a sawmill in Irian Jaya and plans to establish a veneer mill as an initial step towards the gradual development of an integrated wood industry.

He contended, however, that as the requirement to build a wood industry was meant to help speed up the development of Irian Jaya, Djajanti had for a long time been contributing to that province's development through its sago and shrimp processing plants.

According to him, more thorough studies should be made before a major wood industry that requires a large investment is established. (09/vin)