Perhutani to invest in non-forestry areas

JAKARTA (JP): State-owned forestry firm Perum Perhutani will spend a total of Rp 26 billion (about US$2.35 million) in fresh investment this year in agribusiness activities.

Perhutani director Marsanto, M.S. said on Thursday the effort would be part of the company's strategy to diversify its business into nonforestry activities.

He said revenue from its teakwood plantations had continued to decline lately due to rampant theft.

"With the new investment, we'll seek other potential resources in the forest. But, forestry is still our core business," Marsanto said in a media briefing.

Marsanto said about Rp 16 billion for the planned investment would be obtained from the Ministry of Finance and the remaining Rp 11 billion would come from its own coffers.

According to him, the money will be used to finance the company's projects under a profit-sharing scheme or through equity participation with other local companies.

Marsanto said among the potential areas the company plans to focus on were agribusiness, including potatoes and mushrooms, and the marble making industry.

"We are finalizing the memorandums of understanding with four local marble making companies including PT Aldaka Selo Indah, PT Dian Niaga Batuan, PT Sembilan Warna and PT Java Stone Perkasa," he added

He said farming projects would also involve local farmers living near the company's teakwood plantations in a bid to stop theft.

Perhutani lost Rp 464.8 billion ($49 million) worth of trees last year because of widespread theft at its forestry concessions in Java.

According to the company's official data, some 740,584 million trees per year, mostly teakwood, were stolen during the past four years.

"The company's stock of teakwood dropped by 20 percent to about 28.33 million last year, from 34.20 million in the previous year," Marsanto said.

Perhutani manages 1.95 million hectares of forests, mostly teak. State forests outside Java are being managed by PT Inhutani. (03)