Govt plans to divest 15% stake in Sucofindo

JAKARTA (JP): The government will divest 15 percent of its shares in surveyor company PT Superintending Company of Indonesia (Sucofindo) to Swiss company Societe Generale de Surveillance (SGS).

Sucofindo president director Didie B. Tedjosumirat said on Tuesday the move was crucial as it would give the company wider market access and more advanced technology through its strategic partner in light of expected fiercer competition from foreign surveyor companies in 2003.

SGS, which currently owns 5 percent stake in Sucofindo, had actually expressed its readiness to boost its ownership to 50 percent, he said,

"But the government was cautious in divesting so much and considering increasing SGS's ownership to 20 percent," Didie said, adding that if the government saw the partnership to be beneficial it may further increase its shares.

Sucofindo, established in 1956 by the government in cooperation with SGS, was the first surveyor company in Indonesia. SGS owned 50 percent of the company but it was reduced to 20 percent in 1971 and to only 5 percent in 1985.

Based on the company's regulations, the government will give SGS first option should it want to divest its stakes in Sucofindo, Didie said.

Negotiations on the divestment plan have been delayed as the government has not appointed an auditor, or financial and legal consultants yet, he said.

"We have not made any headway since the ministry of investment and state enterprises development was liquidated in August," Didie said.

He said Sucofindo's performance could be increased to twice its usual 20 percent growth a year if SGS was allowed to increase its ownership.

"With a strategic partner, Sucofindo could grow a lot faster, with bigger revenue and better performance than now," Didie said.

Many foreign companies have expressed keen interest to buy the 15 percent stake if negotiations with SGS failed, he said, adding that the government would only consider companies with better technology, network and system information than Sucofindo.

Sucofindo recorded a revenue of Rp 300 billion in the period between January and June this year, Didie said.

This is actually 15 percent lower than during the same period in 1999 because of the exchange rate of the rupiah against the dollar, he said, explaining that some of the fees paid by customers were in dollars.

"But in volume, this first semester is about 10 percent higher than the first semester of 1999," he said.

Didie said he is optimistic the target of Rp 600 billion in total revenue would be met this year although the company would have to perform harder during the last few months.

"We are worried that during the fasting month, surveying activities would decrease," he said.

Sucofindo started out by providing commodity inspection services, especially for agricultural products, for the government. It now provides technical services, commodity and trade facility inspection services, laboratory, and certification services. (tnt)