PT Cipendawa lays off majority of its workers

JAKARTA (JP): Publicly listed poultry producer PT Cipendawa Farm Enterprise said on Thursday it had laid off 790 of its 946 employees as part of its cost-cutting measures to survive the hard-hitting crisis.

The company said in a statement sent to the Jakarta Stock Exchange (JSX) management that the remaining 156 employees would continue to run the company's business operations.

"The employees and the management have reached an agreement on the layoffs that has been accepted," the statement said.

The statement said that although the cost-cutting measures would cause a 62 percent decline in the company's production, they would save Rp 766 million (US$69,600) in operating costs this year and Rp 5.22 billion next year.

The company is currently negotiating with foreign investors from Vietnam, Sri Lanka, Cambodia and Myanmar, the statement added.

Company president Soekaryo said early this month that the firm had closed its operations since Aug. 1 and promised to give severance payments to the employees who were forced to resign.

Although the company did not state the reason for halting its operations, some analysts said that it was partly due to its huge foreign exchange debts.

Like all local poultry firms, Cipendawa, which breeds and raises chickens, has suffered from the soaring price of feed, most of whose components are imported.

Many second and third-line companies on the local exchange are currently on the edge of bankruptcy because of their inability to repay offshore debts caused by the rupiah's 80 percent fall against the U.S. dollar since July last year.

The rupiah hovered around 11,000 to the American dollar on Thursday compared to its pre-crisis level of 2,450.

The JSX management said on Thursday that it had resumed trading in Cipendawa's stocks on the local bourse after a nine- day suspension.

According to the 1997 Indonesian capital Market Directory, Cipendawa is 36.75 percent owned by Probosutedjo, the half brother of former president Soeharto, Ratmani (7 percent), Kasman Gozali (5.25 percent), Agus Nursalim (5.25 percent), Nurdin Latief (5.25 percent), Aris Sumatra (5.25 percent), Muljono Sukohardjo (5.25 percent) and the investing public (30 percent). (aly)