IPTN, four other strategic firms unhealthy: Tanri

JAKARTA (JP): Five of the state-owned 10 strategic industries, including aircraft manufacturer PT Industri Pesawat Terbang Nusantara (IPTN) are considered unhealthy, according to State Minister of the Empowerment of State Enterprises Tanri Abeng.

The industries were previously controlled by the Strategic Industries Supervisory Agency (BPIS), which was chaired by B.J. Habibie, who is now the country's President.

IPTN, with assets of more than Rp 3 trillion, made a loss of Rp 153.86 billion in 1996, Tanri told members of the House of Representatives Commission V for industry during a hearing last week.

He did not provide figures for IPTN's past performances, but BPIS key executive Giri Suseno, now minister of communications, said early last year that the company suffered Rp 185.55 billion in losses in 1995.

The International Monetary Fund forced the government to stop state spending for IPTN in January, as part of sweeping economic reform programs to help lift the country out of its economic crisis.

IPTN, which is a pet project of Habibie, who established the company 23 years ago, is currently implementing a US$2 billion jet project, which started in 1994 and initially designed to be completed by 2002.

Tanri said the four other unhealthy industries are explosives manufacturer PT Dahana, engineering firm PT Boma Bisma Indra, military equipment manufacturer PT Pindad and electronics manufacturer PT LEN Industri.

He said Boma and Pindad suffered losses of Rp 15.50 billion and Rp 25.50 billion respectively in 1997, but that the other two unhealthy firms made profits.

According to Tanri, the economic crisis has caused various hardships for the strategic industries, including liquidity problems due to their high debt to equity ratio, shrinking domestic market, being highly dependent on imported materials and components, and the cancellation of several state-funded projects.

He said the other five strategic industries also had relatively high debt to equity ratios.

The healthy industries are shipbuilder PT PAL Indonesia, train equipment producer PT Inka, telecommunications equipment manufacturer PT Inti, and steelmaker PT Krakatau Steel.

Tanri did not specify the condition of engineering firm PT Barata Indonesia, but it did had a negative liquidity, even though it made a net profit of Rp 22.60 billion last year.

He also reported that all of the strategic industries had a very low return on investment, indicating that the companies were not efficient.

The office of the State Ministry of State Enterprises was established early this year with a mission to restructure 159 state companies, including privatizing 12 of them to raise Rp 15 trillion in the current 1998/1999 fiscal year ending in March.

State companies previously supervised by their related ministries, including BPIS, are now under the supervision of Tanri's office.

Tanri has expanded the number of strategic industries to 16 companies, and is planning to form a holding company, which is expected to be launched next month. (rei)

Table: Performances of Strategic Industries, 1997 (Rp billion)

Company Health Sales Profit/ Asset

category loss --------------------------------------------------------------------- PT Inka healthy 101.06 12.15 187.05 PT Inti healthy 728.65 79.66 1,061.49 PT Dok dan Perkapalan Surabaya very healthy 96.02 3.01 98.69 PT Pal Indonesia very healthy 297.70 6.54 1,038.00 PT Industri Kapal Indonesia very healthy 37.90 0.63 103.13 PT Barata Indonesia - 101.31 22.59 162.28* PT Krakatau Steel very healthy 3,002.00 182.03 5,645.24 PT Industri Gelas not healthy 46.11 3.04 260.29 PT Dahana not healthy 122.17 3.36 90.12 PT Boma Bisma Indra not healthy 96.32 (15.50) 197.97 PT Pindad not healthy 102.97 (25.49) 480.29 PT IPTN not healthy 369.57 (153.86) 3,040.00** PT LEN Industri not healthy 76.53 2.38 125.36 PT Dok dan Perkapalan Kodja Bahari - 151.56 (152.22) 689.72* PT Batan Teknologi - 5.15 0.30 25.97 PT Survey Udara Penas - 2.78 0.19 14.38

* Based on 1997 projection

** Based on 1996 financial reports

Source: State Minister of the Empowerment of State Enterprises