Local surveyor firm to diversify its products

Local surveyor firm to diversify its products

JAKARTA (JP): State-owned PT Surveyor Indonesia will diversify
its products and reduce the number of foreign personnel in its
overseas branches prior to the termination of its pre-shipment
inspection contract in April 1997.

Toga M. Sitompul, a Surveyor Indonesia director, said
yesterday that his company will continue with its other
businesses after the contract, which has been the lifeblood for
the company.

"As the contract will expire, we are of course looking for
other jobs, either from the government or the private sector,"
Toga said after witnessing the signing of a memorandum of
understanding between Surveyor Indonesia and German surveyor firm
TUV Nord.

Surveyor Indonesia president Faried Sybli Barchia said his
company and TUV Nord will set up a joint operation in the field
of ISO-9000 and ISO-14000 certification.

In addition to quality management services, Toga said Surveyor
Indonesia will enter other inspection businesses, including the
halal certification of food to be consumed by Moslems, assessing
the value and prices of aircraft, ships and other high-tech
products.

"We so far have not done enough in quality assurance as well
as in inspection businesses in general because all of our
resources have been directed toward pre-shipment inspection. Now,
however, we are changing and we can do many things," Toga said.

The government, through a finance minister decree dated May
28, will terminate Surveyor Indonesia's pre-shipment inspection
contract, effective on April 1, 1997, or three months earlier
than its original expiration date.

The decree, however, does not stipulate if the pre-shipment
inspection system will be maintained or not. It only asks
Surveyor Indonesia to prepare for the termination of its
contract.

The decree is possibly to allow the Directorate General of
Customs and Excise to resume its inspection authority over
exports and imports.

The directorate general lost its inspection authority in mid-
1985, when the government installed the pre-shipment inspection
system for Indonesia's imports in a bid to ensure the smooth flow
of imports.

"It is only one contract. And normally, a company has many
contracts in hand. So, when one of its many contracts expires, it
should not create any problem for the company," Toga said.

However, revenues from the pre-shipment inspection contract
have played a vital role in the company's total revenues. The
company was established in 1991 by the government, in cooperation
with the Geneva-based Societe Generale de Surveillance, to take
over the inspection of Indonesian imports at points of loading.

Toga projected that the company's net profit will decrease
sharply when the company stops conducting pre-shipment inspection
works for the government next year.

The company expects to record a net profit of Rp 75 billion
(US$32 million) this year, up from Rp 25 billion last year and Rp
13 billion in 1994. However, the company's net profit is expected
to drop to Rp 40 billion next year. Toga said the company's net
profit is likely to drop again in 1998.

To reduce operation costs, Toga said, his company plans to
dismiss some 500 foreign personnel at its 17 foreign branches.

However, he added, the company will retain Indonesian
personnel in its overseas branches to run their operations.

"There is no other single business entity in Indonesia, either
state or privately-owned, which has as an overseas network as
extensive as Surveyor Indonesia. Our network has become a
national asset which must be maintained," Toga said.

He added that the company will use its overseas branches for
Indonesia's international trade purposes. The company will offer
data-providing services to both exporters and importers.

When asked about a possible merger with the other state
surveyor firm, PT Sucofindo, Toga said his company is ready to do
whatever its shareholders want.

The Ministry of Finance's Director General for State
Enterprises Bacelius Ruru has said that the government is
studying the possibility of merging Surveyor Indonesia and
Sucofindo for the sake of efficiency. (rid)