Perhutani wants 14.6% increase in revenue

JAKARTA (JP): State-owned forestry company Perum Perhutani announced yesterday that it expected Rp 1.01 trillion (US$134.66 million) in revenues, up 14.6 percent from the Rp 881 billion the previous year.

Perhutani's president H.M Harnanto said that his company would not only raise production but also improve efficiency to achieve the target.

Perhutani will cut all expenses to minimize the impact of the crisis, which has hit the country since July last year, he said at the opening of the company's annual plenary meeting Wednesday.

The meeting was officially opened by the Minister of Forestry Djamaludin Suryohadikusumo.

Harnanto also said that Perhutani's revenue of Rp 881 billion last year exceeded the target despite the decline in the sales since in July.

He said that the declining was mainly caused by the sluggish demand for wood and wood-related products in the domestic and overseas market and the products' low prices in overseas.

"For this year, Perhutani will increase its exports in line with the government's policy to earn more foreign exchange by boosting exports," he said.

Harnanto said that the company's export last year reached Rp 231.7 billion (US$48.8 million) up from Rp 195.6 billion gained in 1996. Most of which came from selling garden furniture in the overseas market, which worth US$30 million.

Perhutani, founded in 1972, currently manages some 2.5 million hectares of forests on Java, most of which are teak plantations.

The company, which has teak and pine plantations as its core business, earns 75 percent of its total revenue from the sales of teakwood.

Seventy-two percent of the revenue from teakwood sales come from the domestic market and the remaining 28 percent from exports.

Up to 86 percent of the revenue from the domestic market was generated by the sales of teak logs and the remaining 14 percent by the sales of processed wood and non-wood forest products.

About 71 percent of Perhutani's export earnings came from the sales of finished teak and other timber, and the remaining 71 percent from nonwood forest products such as gum resin and turpentine.

Gum resin contributes the most to the company's revenue from nonwood forest products. Gum resin exports last year reached US$27.2 million up 13 percent from its initial target.

Meanwhile, Harnanto said that Perhutani's forest security patrols last year managed to salvage stolen and smuggled timber worth up to Rp 2.2 billion. The company also suffered Rp 447 million losses due to last year's forest fires which razed around 44,000 hectares of its area. (gis)