Retail sector deal thrown into doubt

Retail sector deal thrown into doubt

JAKARTA (JP): City Council has questioned whether a
cooperation program between small entrepreneurs and Goro
wholesale company would continue after its management was taken
over by the Confederation of Primary Cooperative Associations
(Inkud) early this month.

Head of Commission B for economic affairs, Djafar Badjeber,
said the future of the cooperation program, which they had mulled
over in March, was uncertain after the Goro management takeover.

"The Goro management has not informed us about the future of
the cooperation after the management takeover. We hope that Inkud
will continue the project because it is a good concept aimed at
helping people lift their living standards," he said.

The so-called "warung (small shop) Goro" concept was proposed
by the management of Goro to the city administration and accepted
by Governor Sutiyoso in February.

The scheme is also intended to strengthen small shop owners so
that the retail sector would no longer be dominated by
supermarkets and modern stores.

Under the concept, Goro will offer each store a capital of Rp
50 million (US$4,166) in the form of goods. Goro will also train
the shop owner in retail business management.

According to Djafar, about 500 people have shown interest in
taking part in the cooperation program.

However, he said, the Goro management has never informed the
council on the number of people who have actually opened warung
Goro shops.

Goro, established in 1995, was 55 percent controlled by PT
Goro Batara Sakti and 45 percent owned by PT Goro Yudhistira
Utama before the takeover. Goro Batara was 80 percent owned by PT
Humpuss, headed by former president Soeharto's youngest son
Hutomo Mandala Putra, and 20 percent controlled by businessman
Ricardo Gelael. Goro Yudhistira was 75 percent owned by Goro
Batara and 25 percent by Inkud.

But later, Inkud said it had taken over Humpuss' 80 percent
stake and Gelael's 20 percent stake in Goro Batara, making it the
full owner of the wholesaler.

Djafar said the council planned to summon representatives of
Inkud to discuss the matter.

"We will ask whether Goro's new management is still able to
supply merchandise to warung Goro shops because they lost two
markets in the recent riots," he said.

He added that he was not sure if the meeting could take place
in the near future due to the situation.

Djafar said the administration should take action if the new
management failed to continue the project.

"An alternative could be that the city speed up the
establishment of its own food distribution company, PT Waserda
Jaya, to take over the project," he added.

The plan to establish Waserda Jaya was proposed by Deputy
Governor for Economic Affairs Harun Al Rasyid in March.

The new company is expected to enable cooperatives to compete
with other retailers. (ind)