Hitachi estimates 50% drop in sales

JAKARTA (JP): PT Hitachi Construction Machinery Indonesia, a heavy machineries producer, expects a 50 percent drop in sales this year partly due to the government's belt-tightening program.

A company director, Gunawan Setiadi, said yesterday that the rescheduling of several large-scale projects would significantly reduce the procurement of heavy equipment in the country.

This would result in a decline of company sales by over 50 percent, he said.

The government announced last month the postponement or review of Rp 111.18 trillion (US$38 billion) worth of government and state-related projects as part of measures to cope with the currency crisis which has hit Indonesia since early July.

The retrenchment includes 81 projects worth Rp 49.57 trillion which will be postponed. The transportation sector is the worst affected with 62 projects worth Rp 33.01 trillion and the mining and energy sector valued at Rp 14.68 trillion.

Seventy-five projects worth Rp 61.62 trillion are under review. The mining and energy sector leads with 11 projects worth Rp 39.13 trillion, followed by the transportation sector with 32 projects worth Rp 10.92 trillion.

The company, which was established in 1991, is jointly owned by Japan's Hitachi Construction Machinery Co. Ltd, Itochu Corporation, PT Murinda Iron Steel, PT Hexindo Adiperkasa and PT Anggaputra Dhananjaya. The company produces hydraulic excavators and heavy equipment components such as track frames, side frames, arms and buckets at its plant in Bekasi, West Java.

This year the company has produced more than 2,000 hydraulic machines, with 48 percent local contents.

The company has exported 10 percent of its products, including excavator components to Japan and the Netherlands and complete excavators to Thailand, Malaysia and Brunei Darussalam, totaling 175 excavators.

The company's other director Kazuo Yamashima said the company's total exports were expected to reach $14 million this year and it was projected to increase by 15 percent next year.

Gunawan said the company, which has been awarded an ISO 9002 certificate for its quality management, would continue to pay full attention to the welfare of its employees and the population in the area.

The company, which celebrated its sixth anniversary Wednesday, has more than 600 employees. It sent at least 56 employees to Japan for special training last year. (08)