Fri, 11 Feb 2000

Komatsu names first local president

JAKARTA (JP): Publicly listed heavy machinery manufacturer PT Komatsu Indonesia appointed its first Indonesian president in an extraordinary shareholders meeting on Thursday.

The Japanese parent company and principal shareholder, Komatsu Ltd., selected Budiarjo Sosrosukarto to head the firm, breaking the 17-year tradition of Japanese leadership of its Indonesian operation.

"The change in the leadership's nationality is part of further globalizing Komatsu Ltd. through the appointment of local managers in its overseas plants," Budiarjo said in a media gathering.

Budiarjo, the 10th non-Japanese manager to be promoted to head one of the company's 15 operations outside of Japan, succeeds Hiroshi Okado, who has been appointed a commissioner.

Budiarjo said that by promoting local managers, Komatsu, as a global company, intended to bridge racial and cultural differences in its management.

The first non-Japanese to become president of one of its overseas units was an American who was appointed to lead its operations in the United States in 1996.

The firm, which began operating in Indonesia in 1982, manufactures heavy equipment such as tractors, loaders and excavators. It currently employs 10 Japanese expatriates and 816 local workers.

Komatsu Indonesia, which is listed in Jakarta, is 55.13 percent owned by Komatsu Ltd., 18.28 percent by publicly listed PT United Tractors and 18.52 percent by the public, with Japanese firms Sumitomo Corporation and Marubeni Corporation owning 4.25 percent and 2.83 percent respectively.

For this year, Budiarjo said, the company planned to double its revenue to Rp 1 trillion (US$139 million), but it would depend on a turnaround in the Indonesian economy.

Komatsu sold 503 units of equipment last year, generating Rp 500 billion in revenue and Rp 100 billion in profits, according to the company's unaudited financial statement.

Budiarjo projected Komatsu could reach its 1996 sales of 1,000 units this year.

"We estimate that companies in the forestry sector will buy our products, as they have not replaced their equipment for the last three years."

He said Komatsu dominated the local market last year with a market share of 41 percent, followed by Caterpillar of the U.S. with 39 percent.

Budiarjo said 156 of the units sold last year were exported, mostly to Malaysia.

During the height of the economic crisis in 1998, the company exported almost its entire sales of 541 units, with only 28 units for the domestic market.

He said the company recorded financial losses of some Rp 18 billion in 1998, due mainly to the sharp depreciation of the rupiah to the U.S. dollar. (03)