Indonesia vows to increase tin production

JAKARTA (JP): Indonesia will increase tin production from 28,353 tons last year to 34,000 tons this year, an executive says.

Erry Riyana Hardjapamekas, president of PT Tambang Timah, the state-owned tin mining company, said in a hearing with Commission VI of the House of Representatives (DPR) yesterday that the country will continue increasing tin output to 35,000 tons in 1998.

Indonesia produced only 25,794 tons of tin in 1992 and 22,163 tons in 1992.

Erry did not specify the share of Tambang Timah in tin production nor the shares of private sector companies.

Tambang Timah usually shares about 80 percent of the country's total tin production.

Erry told the commission, which is in charge of mining, energy and manufacturing, that the country's tin sales last year increased to 28,353 tons from 25,794 tons in 1992.

He said that Tambang Timah, which was hard hit in the 1980s by sharp declines in prices from over US$12,000 per ton to less than $5,000 a ton, is now ready to compete on the world market because a drastic rationalization scheme has helped it reduce production costs from $7,445 a ton in 1989 to $2,997 at present.

The rationalization scheme, which cost Tambang Timah Rp 113 billion ($52.38 million), includes slashing the work force from about 24,000 people to 7,978 as of April, the sale of some of its assets not directly related to production and the transfer of small onshore mines to private sector firms. The number of the employees will be further reduced to 6,154.

Profits

Erry said the declines in production costs will help the company gain more profits in the coming years.

"Our after-tax profit, which declined from Rp 34.45 billion in 1992 to Rp 20.61 billion last year, is expected to increase to Rp 33 billion this year, to Rp 35 billion next year and to Rp 40 billion in 1996," he said.

Tambang Timah suffered a deficit of Rp 25.1 billion in 1990 and Rp 254.3 billion in 1991.

Erry said profit gaining in the last two years will support Tambang Timah's plan to sell part of its shares to the public through the Jakarta and Surabaya stock exchanges in November.

"We expect to generate more than Rp 100 billion from the share sales in November," he said.

He explained that the company will use the funds to be generated from the share offering to repay debts to banks and to finance the modernization of production facilities.

The company has total debts of Rp 61 billion. (yns)