Indonesia seeking increase in tin export quota

JAKARTA (JP): The state tin mining company PT Tambang Timah is expecting to double its net profit to over Rp 40 billion (US$18.26 million) this year and is seeking an increase in the country's annual tin export quota for 1996 to 35,000 tons.

"The jump in our after-tax profit this year is mainly due to the world's robust market and an improvement of our efficiency following the company's restructuring program, which began in 1989," the company's president, Erry Riana Hardjapamekas, told reporters on Saturday.

He said that the company's unaudited before-tax profit during the first 11 months of this year reached Rp 80 billion.

"We are optimistic that our net profit will be higher than the originally projected Rp 40 billion," he added.

Erry said that tin prices on the world market, which reached $5,900 per ton over the weekend, are estimated to average at $5,500 this year, as compared to last year's $5,000 average.

"We expect tin prices to average at $5,600 per ton next year," he said.

In the latter part of the 1980s, tin prices dropped from over $12,000 per ton to $4,000 per tons, inflicting a deficit of Rp 25.61 billion at Tambang Timah in 1990.

Erry said the current robust market, which is partly prompted by a recovery in the economy of developed countries, is predicted to continue until the end of this decade due to increasing demand.

Demand for tin in Asia is likely to grow by eight percent annually, as compared to an average growth of only two percent throughout the world, he said.

Erry also said his company, which exports about 95 percent of its output, plans to increase its sales on the domestic market to six percent.

He said that under the restructuring program, the company has reduced the number of employees to approximately 6,500 this year from 23,000 in the 1980s.

The program has helped increase the company's efficiency by 25 percent and the company can reduce its production costs from over $6,500 per ton to less than $5,000, he said.

Quota

Erry said the company, which now produces four brands of tin ingots -- Banka low-lead tin, Banka tin, Mentok tin and Koba tin -- plans to seek an increase in Indonesia's annual export quota to around 35,000 tons per year, beginning in 1996, from the 30,500 tons at present.

"Indonesia is expected to submit a proposal to the Association of Tin Producing Countries next year," he said.

The association groups Australia, Bolivia, Indonesia, Malaysia, Nigeria, Thailand and Zaire.

The executive said that the company has expanded its tin smelting capacity to 45,000 tons per year, following the installation of a new kiln, thereby making Indonesia the second biggest tin producer in the world after Brazil.

Besides Tambang Timah, tin is also produced by private companies in Indonesia.

But in the case of low-lead tin, Indonesia, with an annual production capacity of 900 tons, is the biggest in the world, Erry said.

He said Tambang Timah sells 50 percent of its production to Asian countries, 25 percent to Europe, 20 percent to North America and five percent on the domestic market.

The company is now in a position to sell shares to the public next year. (fhp)