Minister to revamp state firms

Minister to revamp state firms

JAKARTA (JP): Minister of Industry and Trade Tunky Ariwibowo said here yesterday that the government would restructure state- owned companies in a move to boost their efficiency.

Tunky said the restructuring plan would cover both improvement of the management and the consolidation of business activities.

"Money losing firms, which have no future, would be liquidated. Those with good prospects would be expanded," he told newsmen following a meeting with President Soeharto at the latter's Jl. Cendana residence here.

Tunky said that state-owned companies which have similar business lines would be consolidated under a restructuring plan which was proposed by Minister of Finance Mar'ie Muhammad.

"We don't have a fixed schedule. But we have been asked by the minister of finance to immediately carry out the plan," said Tunky, who was accompanied by Mar'ie during the meeting with the President.

The minister of finance, which represents the government in the ownership of state-owned firms, did not make any comment about the restructuring plan.

"The consolidation of fertilizer producers, for example, will be part of the restructuring plan in the Ministry of Industry and Trade," Tunky said.

He said the number of state-owned companies operating in industrial and trading activities totaled 62 as of December, 1995. The number of money losing firms rose to nine last year from eight in 1994.

Revenues

Tunky said that the total sales revenues of the state-owned industrial and trade-related companies rose to Rp 9.56 trillion (US$4.1 billion) in 1995 from Rp 7.79 trillion in 1994, with before tax profits rising to Rp 1.06 trillion from Rp 633.63 billion.

The amount of losses incurred by state-owned firms rose to Rp 108.33 billion last year from Rp 82.74 billion in 1994, he said.

The minister also reported to the President about efforts to cope with the shortage of urea fertilizer supplies, which hit farmers in almost all paddy producing areas in Java and Sumatra in December and January.

At a press briefing held following the meeting with the President, Tunky blamed the distribution system for the shortage of urea supplies.

Tunky ruled out any increase in exports as the cause of the supply shortage, given the fact that none of the fertilizer producers were licensed to export urea during the last two months.

He said that the amount of the monthly supplies would be increased so that there would be more stocks to meet an increase in the demand from farmers.

The urea supply was projected at 6.14 million tons this year, while demand might reach only four million tons, the minister said.

Tunky also said yesterday that the government was targeting an increase in the cement supply to 28.5 million tons this year from 24.3 million tons to meet higher demand.

Around 26.5 million tons of the supply would be procured from domestic producers, while the other two million tons would be imported, he said.

The domestic demand for cement was expected to increase by 16 percent to 27.5 million tons this year from 24.1 million tons in 1994. (hen)