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"Actually, the two concessions should have been revoked, and they would have had it not been for their log-supply contracts with Barito," the minister said.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