PAL shifts focus to ship maintenance

PAL shifts focus to ship maintenance

JAKARTA (JP): In anticipation of a further downturn in orders
for new ships, state-owned shipbuilding company PT PAL has
announced that it will focus its operations on general
engineering and maintenance activities.

The company's president, Adwin H. Suryohadiprodjo, said in
Surabaya on Friday that orders for new ships would continue to
decline next year.

Adwin estimated the contracts for new ships would fall this
year by about 40 percent.

Adwin was quoted by Bisnis Indonesia as saying that as a
result, the company would "shift its focus to maintaining local
ships".

The ship-building company recorded a turnover of Rp 750
billion in the period between January and September.

Adwin said about Rp 480 billion, or about 65 percent, was
generated from ship-building projects, and the remaining Rp 265
billion from general engineering and maintenance services.

He said that due to the uncertain political climate, several
buyers were reluctant to put down a 10 percent down payment as
stipulated in their agreements.

Adwin said 50 percent, or between Rp 40 billion and Rp 45
billion, of the company's estimated profit this year would come
from general engineering and maintenance services.

In 1998, the company secured Rp 2.1 trillion in contracts to
build new ships and power-generation equipment.

In order to weather tighter international competition, last
year PAL focused on the construction of small and medium-sized
ships.

He said orders for power-generation equipment for the
electricity, oil and gas industries also increased sharply last
year. (03)