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)