Humpus to diversity business
Tony Hotland, Jakarta
Sea transportation provider PT Humpuss Intermoda Transportasi (HIT) is taking measures to expand and diversify its business in anticipation of possible shrinking revenue in the future caused by the fluctuating rupiah and unstable economic situation.
HIT -- whose core business is transportation of oil, liquid natural gas (LNG) and methanol -- claimed on Monday to have secured 1,000 hectares of land for development into industrial and coastal/maritime zones and another 500 hectares of land for further expansion of those zones in Gresik, East Java.
"We're working with some local investors, and already 11 companies are interested in renting lots. We've reclaimed the land and it will take about three years to complete the industrial zone. We haven't started anything for the maritime zone though," said Indra Tjahja, the president of HIT's holding company, PT Humpuss. The business group was founded by Hutomo Mandala Putra, the youngest son of former president Soeharto who is currently serving a jail sentence. PT Humpuss controls about 64 percent of HIT shares.
Indra added that publicly listed HIT was also in discussion with state electricity company PLN to build a coal-fired power plant in Kalianda, South Sumatra.
He said the company would invest about Rp 2 trillion (US$213.21 million) in the development of the industrial areas and less than $15 million for the power plant.
"A sharing scheme for the power plant is being discussed with PLN," he said, adding that the company planned to issue bonds worth Rp 300 billion to Rp 500 billion in early 2005 to help finance the projects.
HIT's new president, Eddy Pramono, said that the company had also been diversifying its business into transportation for coal, and chemical substances, and containers.
"We started leasing transportation for coal from Banjarmasin (South Kalimantan) to Suralaya (West Java) early this year. We've also provided transportation for containers from Jakarta to Padang and from Bitung, North Sulawesi, to General Santos, the Philippines," Eddy said.
He was elected as the replacement for Budhi Halim during a company extraordinary shareholders meeting on Monday.
Budhi confirmed the company's new direction and said that the new sectors would be evaluated in July to see what would be the most profitable on which to focus.
The expansion and diversification efforts are also in anticipation of state oil firm Pertamina's plans to cut back on expenditure and impose tight financial policies to remedy its delicate financial situation.
Currently, seven of HIT's 12 tankers are on long-term lease to Pertamina, with these contracts contributing 75 percent of HIT's 2003 revenue. The contracts will gradually expire in the period to 2009.
The shareholders also agreed in their extraordinary meeting to pay Rp 30 per share in dividend.
HIT booked Rp 147.6 trillion in net profit last year, up 7.4 percent from 2002.