Give IPTN, PAL time to make profits: Habibie
Give IPTN, PAL time to make profits: Habibie
JAKARTA (JP): Minister of Research and Technology B.J. Habibie said yesterday that the strategic industries under his control should be given two to three years to prove that they can bring home profits, provided export credits are granted for the sales of their products.
"Give our strategic industries conditions like those enjoyed by our competitors. And within two to three years, we will see if the industries are profitable or not," Habibie told reporters during a break of a hearing with the House of Representatives' Technology and Development Planning Commission.
Habibie said the Bandung-based aircraft manufacturer, PT IPTN, and its sister ship-building company, PT PAL in Surabaya, were still suffering financial losses because of the absence of export credits. He did not disclose how much the companies' losses were.
The two companies are under the control of the Agency for the Management of Strategic Industries (BPIS), which is chaired by Habibie.
"If we have to sell all our products on cash-and-carry terms, how can we compete with foreign or domestic producers which offer credit facilities for buyers?," Habibie asked.
Habibie, IPTN president, said the absence of export credit facilities for buyers has made it difficult for IPTN to compete with foreign producers.
He said that it was IPTN which opened the Turkish market and won a contract to supply it with 52 CN-235 aircraft, a commuter airplane developed jointly by IPTN and CASA of Spain.
"However, we will gain only 30 percent of the total sales value of the aircraft, with the other 70 percent going to CASA, which offered export credits to buyers," Habibie said.
He said President Soeharto had instructed him to hold a meeting with the Governor of Bank Indonesia (the central bank), the Minister of Finance and IPTN executives to decide upon mechanisms for providing credit for the export of aircraft.
Debt
He said that two other strategic companies under BPIS were also suffering financial losses because of their debt burdens. They are the engineering firms PT Bosma Bisma Indra and PT Bharata, both based in East Java. Here again, the minister decline to reveal the size of the losses.
Export credits will also be sought to support the sale of goods produced by the other strategic companies under BPIS, Habibie said.
BPIS also overseas six other strategic industry companies: electronics manufacturer, PT LEN; arms manufacturer, PT Pindad; railway equipment producer, PT Inka; telecommunications equipment manufacturer, PT Inti; steel producer, PT Krakatau Steel; and explosives manufacturer, PT Dahana.
When asked what he would do if the national budget could not support the granting of export credits, Habibie replied: "Just dissolve all the strategic industry companies which provide employment for 37,000 well-educated people." (rid)