PT Prima Comexindo selected for jet deal

JAKARTA (JP): The government will assign PT Prima Comexindo, a trading house owned by businessman Hashim Djojohadikusumo, to export palm oil, coffee and rubber to Russia as part of the countertrade deal for jet fighters and helicopters.

The director general of international trade at the Ministry of Industry and Trade Djoko Moeljono said here yesterday the planned appointment of Prima Comexindo was based on its strong network in the Eastern Europe region.

"There is no other Indonesian trading firm which has as extensive network in that region as Prima Comexindo does," Djoko told journalists after accompanying the minister of industry and trade in a meeting with 18 new ambassadors to be posted in various countries.

Prima Comexindo has long assisted Indonesia's trade with Russia. It is one of few Southeast Asian trading firms which have representative offices in that country.

The company has also pioneered trade with several newly independent countries, including Kazakhstan, Uzbekistan and Turkmenistan -- all Soviet Union former states.

It has overcome the difficulties of account payments with Uzbekistan businesspeople by forging countertrade agreements, under which Indonesian tea is exported in return for Uzbeki cotton. It is currently building a cotton-spinning factory in the country, with investment of almost US$30 million.

In Turkmenistan, the company has existing deals for assembly line facilities and imports about 500,000 tons of cotton annually to Indonesia.

Prima Comexindo, along with Indonesia's international telecommunications operator PT Indosat and Kazakhstan state-owned telecommunications firm Jarykh Ltd., has formed a joint venture company in Kazakhstan, named Inkatel, to provide small aperture terminal telecommunications services in the Central Asian republic.

But Djoko refused to disclose the value of the countertrade between Indonesia's agriculture produce and Russia's Sukhoi-30K jet fighters and MI-17-IV helicopters, saying "it is still being negotiated".

Sources said the deal would cost up to $600 million, with 10 percent of it to be paid in cash and the rest to be paid through a countertrade deal.

Indonesia opted to buy 12 Sukhoi-30K jet fighters from Russia after the government decided to cancel an order for nine F-16 fighters from the United States.

Minister of Trade and Industry Tunky Ariwibowo said earlier that countertrade was becoming popular in bilateral trade.

Citing an example, Tunky said Malaysia pursued a countertrade policy when it bought MiG-29 fighters from Russia. It paid the fighters with palm oil.

Indonesia has also pursued a countertrade deal with Thailand, whereby Indonesia will sell two Indonesian-made CN-235 aircraft and buy 110,000 tons of Thailand's glutinous rice in return. (rid)

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