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

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)