Govt, state bank to 'save' Dayak mill

Govt, state bank to 'save' Dayak mill

JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo
said yesterday that his office and the state-owned Bank Rakyat
Indonesia would "rescue" the troubled plywood factory owned by
the Dayak Besar Group in East Kalimantan.

"We will rescue the plywood mill because we are concerned
about their workers," the minister said during a ceremony for the
signing of an agreement between six state banks and his office.

Djamaludin did not specify what he meant by "rescue". He
hinted, however, that it might involve a takeover of the plywood
mill.

"We are going to carry out this rescue operation with Bank
Rakyat Indonesia and other competent plywood firms," he said
without going into detail.

Dayak Besar Group, currently under sanctions by the forestry
ministry, owes around Rp 350 billion (about US$159 million) to a
group of private banks.

Dayak Besar Group, which is partially controlled by
businessman Yusuf Hamka, reportedly dismissed its 2,400 workers
without prior warning last month.

The massive dismissal came after the forestry ministry banned
two of its subsidiaries from transporting their logs and sawn
timber from their forest concessions in East Kalimantan.

Djamaludin said the sanctions were passed because PT Dayak
Besar Vincent Timber Co. and PT Gelora Dayak Besar, two of the
group's subsidiaries which control close to 200,000 hectares of
forest concessions, had repeatedly violated forestry rules.

The two firms had also barred forestry officials from post-
auditing their performance, Djamaludin said.

The minister also warned yesterday that if Dayak Besar tried
to obstruct the "rescue operation" by marking up the net value of
their troubled plywood mill, he would "seize all of their forest
concessions."

Djamaludin said that under yesterday's agreement, he plans to
allocate around Rp 400 billion of reforestation funds to finance
the development of various timber estates this year.

The funds, which are collected as forestry levies from
concessionaires, have so far reached around Rp 2 trillion,
Djamaludin said. (hdj)