SGS finishes desk work assessment on timber companies

JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo said the Geneva-based Societe Generale de Surveillance (SGS) has finished a "desk-work" assessment on three timber companies planning to go public.

Speaking to newsmen after opening a forestry seminar, Djamaludin said the three are PT Artika Optima Inti, a subsidiary of the widely diversified Djajanti Group, the Surya Dumai Group and PT Kiani Lestari, which is controlled by timber tycoon Mohammad (Bob) Hasan.

The minister explained that the desk-work assessment conducted by SGS is only based on data and information supplied by the companies or the Ministry of Forestry.

"SGS has not yet conducted a field assessment on the sustainability of their forest concessions. But, I don't know whether it is needed or not. It depends on their underwriters," Djamaludin said.

He explained that if the underwriters consider a field assessment unnecessary, the timber companies can directly conduct a public presentation for their plans to offer shares.

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

Timber companies planning an initial public offering of shares were earlier required to obtain recommendation letters from the Minister of Forestry before selling shares to the public. The minister's recommendation letters, however, did not serve merely as reference but more as permission. 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, whether their forest harvesting potency can meet the capacity of their plywood manufacturing mills, Djamaludin said.

SGS has been sub-contracted by state-owned PT Surveyor Indonesia to conduct pre-shipment inspections of Indonesian imports.

Djamaludin reiterated that the government will not interfere in the going-public process of timber companies but instead supply necessary information on the companies for those who require it, including investors.

"From public disclosure, potential investors will get a clear outlook on a timber company planning to go public. They will, therefore, decide for themselves whether or not to buy its stocks. If they still need some more information from us, we will provide it to them," he said. (rid)