Pos Indonesia to focus on logistics

Rendi A. Witular, Jakarta

State-owned mail company PT Pos Indonesia plans to focus on the logistics business for the domestic market due to a general downward trend in direct mail business, due to easier availability of electronic mail or e-mail, the company's senior official said.

The company is also planning to sell some of its shares in internet service provider (ISP) subsidiary, PT Bhakti Wasantara Net, via an initial public offering scheme (IPO) next year.

Pos Indonesia president director Alinafiah said the company's decision to focus on domestic logistics management was primarily due to the sensational growth of the business, which has reached an average growth of 100 percent in the past couple of years.

"Direct mail business will become an old song for us. We are planning to revise the position of our company to become a main player in domestic logistics services," said Alinafiah after a hearing with the House of Representatives Commission V for trade, industry and state companies.

Alinafiah said revenue from the company's existing logistics business grew by almost three times to Rp 199.3 billion (US$23 million) in the first semester of this year, up from Rp 66.78 billion in the same period last year.

To support the expansion, Pos Indonesia plans to allocate some Rp 100 billion each year for enhancing infrastructure.

"We are optimistic that we can compete with the already established players, given the fact that we offer better prices," said Alinafiah.

Pos Indonesia expects revenue from the expanded services to contribute around 40 percent of the company's total revenue composition by 2007. At present, logistics management only accounts for about 23.11 percent of the composition, with mail and communication accounting for 57.43 percent and other business accounting for the remaining 24.32 percent.

Alinafiah reiterated that there was currently a decline in growth in the regular mail business, which only grew by an average of 5 percent in the last couple of years. Alinafiah refused to disclose the precise growth figures in terms of revenue.

Pos Indonesia is currently struggling to profit after it posted a loss of Rp 20.38 billion last year. The company said that was mainly due to soaring operational costs, which resulted in a decline in the number of mail users. The company recorded an operational revenue of Rp 1.07 trillion last year.

In 2002, the Bandung-headquartered company booked an operational revenue of Rp 1.02 trillion and a net profit of Rp 41.83 billion.