Djajanti awaits minister's reference for share offering

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)