SGS assigned to assess timber companies

SGS assigned to assess timber companies

JAKARTA (JP): The government has assigned the Geneva-based
Societe Generale de Surveillance (SGS) to assess the
sustainability of the forest concessions of timber companies
which intend to go public.

Minister of Forestry Djamaludin Suryohadikusumo said yesterday
that the results of SGS's assessment will be disclosed to the
public and submitted to the Capital Market Supervisory Board
(Bapepam) for further evaluation.

"It is Bapepam that will decide whether the assessed timber
companies will be qualified to make an initial public offering or
not," the minister told reporters during a break in a hearing
with Commission IV (agriculture and forestry) of the House of
Representatives.

Djamaludin reiterated that forest-based companies intending to
sell shares to the public are no longer required to obtain a
letter of recommendation from his office.

"They are now instead required to have their forest
concessions assessed by SGS because their business viability and
prospects depend on the sustainability of their concessions," he
pointed out.

A timber company planning an initial public offering of shares
was earlier required to produce a letter of recommendation from
the minister.

PT Artika Optima Inti's initial public offering, scheduled for
last June, has been postponed due to the absence of a
recommendation.

Djamaludin explained that SGS had been chosen because it has
the personnel and ability to carry out the assessment.

"If PT Surveyor Indonesia and PT Sucofindo, for instance, had
the personnel and capability to conduct the assessment, I'd
welcome them to join. The more surveyor firms involved, the
better," the minister said.

SGS is the sub-contractor of state-owned PT Surveyor Indonesia
in the conducting of pre-shipment inspection of imports to
Indonesia.

Djamaludin added that the assessment of forest concessions is
completely separate from the assessment of the business and
financial performance of timber companies.

"Obviously, timber firms intending to list their shares on the
stock exchanges are also required to make the compulsory public
expose of their business and financial performance to investors,
securities companies and brokers." he added.

Response

Bapepam and the Association of Indonesian Wood Panel Producers
hailed the minister's decision to ease the requirement on timber
companies intending to go public, saying the move will encourage
more companies to list themselves on local stock markets.

At present only two timber companies are listed on the Jakarta
Stock Exchange (JSX) -- PT Barito Pacific Timber and Sumalindo
Lestari Jaya.

Djamaludin said three more timber companies -- PT Kiani
Lestari, which is controlled by Mohammad Hasan; the Surya Dumai
Group, and PT Artika Optima Inti, a subsidiary of the widely
diversified Djajanti Group -- plan to go public.

The minister said that although timber companies go public,
the government maintains control of their forest concessions.

He reiterated a previous ruling that prohibits timber
companies from including their forest concessions in their fixed
assets because the forests are owned by the government.

"I don't want our forests to be sacrificed simply for the
interest of their shareholders. The government is still empowered
to revoke their concessions if their management does not fulfill
the rulings on sustainability," Djamaludin added. (rid)

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