It's not Barito we're after, Forestry Ministry says

It's not Barito we're after, Forestry Ministry says

JAKARTA (JP): The government corrected a statement made by the
Minister of Forestry on Wednesday, in which he threatened to take
over 49 percent of PT Barito Pacific Timber's forest concessions.

Minister Djamaloedin Soeryohadikoesoemo said on Wednesday that
Barito Pacific Timber, the largest company listed on the Jakarta
Stock Exchange, had "poorly managed" its concessions and would
have to surrender 49 percent of its shares in order to have its
forest concessions renewed.

However, the ministry yesterday virtually retracted the
official threat against Barito.

"It is not Barito we're after but the forest concessions of PT
Aya Timber and PT Yayang Indonesia in South Kalimantan, which
supply logs to Barito's wood mills," read a press statement
issued yesterday by the ministry's acting secretary general, T.
Sarijanto. This statement served to clarify Barito's explanation,
issued Wednesday evening, that Barito's relations with the two
companies were limited to log-supply contracts.

The statement issued yesterday did not mention anything about
Barito's problems with its own 2.2 million hectare forest
concessions. However, it disclosed that the ministry had settled
the problem with PT Aya and PT Yayang by extending the permits of
their forest concessions -- under the condition that a state
forest company would take over 49 percent of their respective
equity shares.

"Actually, the two concessions should have been revoked, and
they would have had it not been for their log-supply contracts
with Barito," the minister said.

No reaction

Surprisingly, the Jakarta Stock Exchange did not react at all
to Djamaloedin's remarks about Barito, which made headlines in
many newspapers yesterday morning.

Barito's shares, which closed at Rp 7,700 on Wednesday, even
rose to Rp 7,850 at the close of the market yesterday, perhaps
because of the immediate clarification issued by Sarijanto.

A broker of PT Gadjah Tunggal DBS Securities said yesterday
that Barito's immediate rebuttal of Djamaloedin's statement,
which was issued on Wednesday evening and quoted by the mass
media, was partly responsible for preventing a price fall.

Meanwhile, economist Kwik Kian Gie told The Jakarta Post that
the ministry's latest move proved that Minister Djamaloedin is a
"consistent and wise man."

"It shows that he walks his talk," he said. "He could simply
refuse to renew the concessions and completely take over the
management of the two companies."

Kwik, however, also warned that the controversy revealed the
inherent weakness of publicly-traded timber companies.

"Barito's success rests largely on in its forest concessions,"
he said, adding that "there is no legal guarantee that the
government will keep renewing the concessions."

In a related development, Bimantara Group executive Peter
Gontha yesterday appealed to reporters to refrain from writing
news that might damage foreign investor confidence in Barito.

Bimantara, owned by one of President Soeharto's sons, is a co-
owner with Prajogo Pangestu, Chairman of the Barito Pacific
Group, of the $1.3 billion Chandra Asri olefin plant project in
Anyer, West Java. (hdj/als/dlz)

Editorial -- Page 4