Merging with SI won't be easy, Sucofindo chief says

JAKARTA (JP): State-owned surveyor PT Superintending Company of Indonesia (Sucofindo) does not mind merging with PT Surveyor Indonesia (SI), but warns it could be difficult.

Sucofindo president Moedjiono acknowledged yesterday the government was considering merging the two state companies.

"But it will be a tough job because SI's overseas branches must be liquidated and SI must start its business -- which is likely to be in Sucofindo's line of work -- from scratch," he said.

Moedjiono was speaking after a hearing with House Commission VI for industry and investment.

He said Sucofindo would comply with government rulings.

"So if the government decides we should merge, what can we say?" he said.

But Moedjiono acknowledged the merger was likely to be better than competition, especially because SI was established to "carry out the government's policy on import operations" rather than seek profit.

Last year, the government said it was considering merging the companies to improve efficiency.

Sucofindo, which is 95 percent owned by the government and 5 percent by Geneva-based Societe Generale de Surveillance (SGS), conducts preshipment inspections of the country's exports.

SI is owned by Sucofindo, SGS and the government. Since 1985 it has been assigned, in cooperation with SGS, to conduct preshipment inspections of imports at overseas ports.

SI's government contract will expire March 31 and the preshipment inspection system will be replaced by a post-audit system to be implemented by the Ministry of Finance's Directorate General of Customs and Excise.

The planned reintroduction of import inspections by the customs and excise office has been protested fiercely by the Indonesian Importers' Association.

The association said last year it feared the change would reintroduce the mountains of red tape which prevailed before the preshipment inspection was introduced in 1985.

Moedjiono said yesterday the government had recently renewed its contract with Sucofindo for three years, so it seems the government, in the meantime, does not intend to replace Sucofindo's operations with the new system.

Moedjiono said Sucofindo's unaudited pretax profit last year was Rp 261.83 billion (US$113.83 million), up from Rp 223.66 billion in 1995.

Its revenue in the last three years has risen from Rp 279.61 billion in 1994 to Rp 365.08 billion in 1995 and Rp 415.36 billion in 1996. (pwn)