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)