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.