Non-business factors a hurdle for PTP listing
Non-business factors a hurdle for PTP listing
JAKARTA (JP): Indonesia's state-owned plantation firms (PTP),
which have been criticized by the World Bank as inefficient,
could go public if non-business factors could be overcome,
according to one expert.
Ridwan Dereinda, director of the Center for Agribusiness
Development and Studies, told reporters yesterday that, from a
business standpoint, the state plantations are fit to be listed
on stock exchanges.
"But there are things under the surface which would have to be
dealt with first, such as the aspects of their human resources
and management systems," Ridwan told a seminar on the development
of human resources in the plantation sector in the globalization
era.
Plans are currently being made to allow PTPs to go public, one
reliable source told The Jakarta Post yesterday, requesting
anonymity.
The source said the listing of the PTPs might be conducted as
soon as next year, in spite of the agriculture ministry's as-yet-
unfinished efforts to consolidate the firms.
In May last year, the ministry reorganized the country's 32
PTPs into nine groups.
The consolidation process, however, has yet to be completed.
A number of observers, including the World Bank, say the delay
is mainly due to difficulties in consolidating the financial
records of the 32 PTPs and the existence of "vested interests" on
the part of the state officials managing the firms.
Minister of Agriculture Sjarifudin Baharsjah has denied this,
saying that the consolidation process is proceeding smoothly.
Politics
Ridwan said that political and legal considerations could also
be a reason for the delay.
"Regulations on the establishment of state-owned holding
companies are still unclear. It is also unclear how public
listing can proceed if the terms between the holding company and
its subsidiaries are not yet fixed," he said.
Ridwan said that, although it would be possible for the PTPs
to go public, such a decision should not be made hastily.
"I would say it should not be considered for the near future.
And people should not have high expectations about the proceeds
of such a listing making a significant contribution to national
development," he added.
Recent estimates put the PTPs' total plantation area at 1.5
million hectares, 20 percent of which has been planted with sugar
cane, mostly in Java, while the remaining 80 percent is planted
with tree crops, mainly palm oil and rubber.
The latest available figures show that, in 1993, the PTPs
recorded total sales of Rp 3.5 trillion (US$1.5 billion), of
which Rp 1.13 trillion was derived from exports. (pwn)