Govt plans to divest 15% stake in Sucofindo

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)