Rekayasa hopes to acquire foreign firm
JAKARTA (JP): State-owned engineering and construction company PT Rekayasa Industry is seeking to acquire a foreign engineering technology licenser firm prior to its privatization.
Technology and marketing division manager Chandra Widodo said the acquisition of a foreign technology licenser was necessary to boost the company's value.
"We're currently in negotiations with four process licenser companies from the U.S. and Europe. We can't disclose their names right now because we have to maintain confidentiality," he told The Jakarta Post on Monday.
A process licenser company is a high-tech firm which owns and holds the patent for a particular engineering technology.
Rekayasa designs and constructs large plants and other facilities for several industries, including the cement and mineral, petrochemical, oil, gas and power, and agro industries.
Rekayasa is one of several state-owned companies set to be offered by the government to foreign strategic partners as part of the country's privatization program.
Chandra said the company had adequate cash reserves to finance the acquisition of a process licenser firm, thanks to its U.S. dollar-based contracts.
"We have been relatively unharmed by the economic crisis," he said.
He said Rekayasa had secured several contracts during the crisis, particularly in the oil and gas industry, which demanded contractors with strong financial capabilities.
The country's largest and most financially secure engineering and construction companies are PT Inti Karya Persada Teknik, PT Tri Patra and Rekayasa. It is no coincidence these are also the only companies in the sector which are still in business.
Chandra said Rekayasa had recorded positive net profits since 1996, adding that profits peaked in 1998 with a net profit of more than Rp 80 billion (US$10.74 million).
He said the company's net profit in 1999 dropped to around Rp 40 billion due to a slowdown in investment.
Chandra expected net profit this year to be basically the same as last year. "However, we believe that after 2001, the industry should pick up."
Chandra does not expect an immediate return of foreign investment into the country despite signs of economic recovery and political stability, a result of questions over legal certainty.
He said Rekayasa was also planning to expand its operation overseas, citing the company's ongoing talks with a subsidiary of Malaysia's Petronas.
"We already have an office in Malaysia. We're trying to enter the overseas market," he said.
Rekayasa was established by the government in 1981 as part of efforts to develop national capability in engineering, procurement and construction, as well as to help prevent the outflow of hard currency to foreign engineering and construction companies.
Rekayasa now employs 829 people, including some 500 technical experts.
The company is 82 percent owned by state-owned fertilizer firm PT Pupuk Sriwijaya, with the remaining 18 percent divided among the government and another state-owned fertilizer firm, PT Pupuk Kaltim. (rei)