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)