Perhutani wants 14.6% increase in revenue

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)