Indonesia to restructure state plantation firms

Indonesia to restructure state plantation firms

HAMBURG (Reuter): Indonesia's state plantation companies PT
Perkebunan (PTP) would be restructured in a bid to improve the
quality and productivity of plantations, Agriculture Minister
Syarifudin Baharsyah said.

"Our customers in Europe need not be apprehensive...the way
we'll do this will not in any case disturb the flow of goods, if
anything it will create more direct trading links," he said in an
interview prior to a presentation given to consumers.

He confirmed plans released in Jakarta in August which involve
merging 26 plantations into nine entities to boost PTP
efficiency, with view to a later stock exchange listing.

"We need to adjust ourselves to the changing behavior of the
market," he said at the presentation.

A World Bank report this year said the PTPs performance was
inferior to that of the private sector, among other reasons due
to low commodities prices in the 1980s.

The minister said the operational performance also needed to
be improved to meet customers' demands for quality and in other
areas such as packaging.

"We want to move downstream to gain from the value added in
processing, for example in rubber goods, and for that we need
structural changes," he said.

The minister also said he wished to assure European customers
that coffee and cocoa export shortfalls were a result of weather
patterns and not an attempt to divert supplies away from
Indonesia's traditional markets.

He said he was pleased tea markets were opening up in eastern
Europe.

He also said he would lobby the European Union to abolish what
he called "discriminatory taxes" on commodities which did not
apply to so-called ACP producer countries which enjoyed special
benefits because of earlier colonial links.