Humpuss to restructure subsidiaries
JAKARTA (JP): The Humpuss Group, controlled by President Soeharto's youngest son Hutomo Mandala Putra, plans to further restructure its subsidiaries in a bid to prepare them for flotation on stock exchanges.
The planning director of the group's holding company PT Humpuss, Bernardino M. Vega, said here yesterday that the group had a number of financially sound companies which could offer shares to the public.
"We are still sounding out the possibility of selling them to the public," Bernardino told journalists attending a ceremony to celebrate the group's 12th anniversary.
Humpuss' first subsidiaries to go public will be its airline PT Sempati Air, which will have its initial public offering later this year, and shipping service provider PT Humpuss Sea Transport, Bernardino said.
Both Sempati and Humpuss Sea Transport will be issuing new shares, which will account for 20 percent of their total shares in their initial public offerings.
Bernardino noted that Humpuss is also preparing two of its petrochemical subsidiaries, PT Kaltim Methanol Industri and PT Humpuss Aromatik, to go public in the near future.
Kaltim Methanol owns methanol plants in Bontang, East Kalimantan, while Humpuss Aromatik has aromatic plants in Aceh. Both companies' plants are currently still under construction.
"We are making our subsidiaries go public rather than the holding company because we want to deconglomerate," Bernardino said.
He said that such "deconglomeration" of large business groups like Humpuss is necessary to face the twin challenges of free trade and economic globalization.
"In this era of globalization and free trade, groups of companies will be challenged to undertake segmentation or deconglomeration of their subsidiaries. That is what the market will demand," Bernardino said.
PT Humpuss currently has 25 companies under its umbrella, compared to 69 in 1993. Of these 25 subsidiaries, six have a total of 15 second-line subsidiaries between them.
The group's main business interests include airlines, oil wholesaling for state-owned oil firm Pertamina, shipping, retailing, wood processing and petrochemicals.
Bernardino explained that the group is currently focusing on the petrochemical industry. Within the next two to three years, this industry will be its main business.
He noted that Indonesia still needs more investment in the petrochemical industry to satisfy growing demand. He forecast that by 2000, Indonesia will need at least 1.25 million tons of purified terephthalic acid and 700,000 tons of paraxylene.
Paraxylene is needed for making purified terephthalic acid, a raw material used in the textile industry.
Humpuss Aromatik's plants in Aceh, which will start commercial production in 1998, are designed to have an annual capacity of 370,000 tons of paraxylene and 160,000 tons of benzene. (rid)