State forestry firms reap Rp 207.2 billion in profits

JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo announced yesterday that before-tax profits of state-owned forestry companies surged last year and are continuing to soar this year.

Djamaludin said the before-tax profits of state-owned firms overseen by his ministry increased by 63 percent last year to Rp 207.2 billion (US$91.7 million), from Rp 130.36 billion in 1993.

"During the first semester of this year alone, the firms recorded total before-tax profits of Rp 177.9 billion, already 85 percent of last year's profit level," he added.

He said that in the future forest firms would not only be judged by their financial performance but also by their ability to conduct environmentally-sound forest management.

"Starting next year, forestry companies, particularly those owned by the private sector, will be required to calculate their 'forest conservation ratio'," he said.

The conservation ratio, he said, is the ratio of the number of trees planted to the number of trees felled. It will be used a basis on which the sustainability of forest concessions will be judged, the minister said, adding that the calculation of the ratio would be made mandatory by a decree of the forestry director general.

Djamaludin said the minimum ratio allowed by the ministry would be one (1:1). The conservation ratio would be made one of the prerequisites forest concessionaires would have to meet before they are allowed to go public.

At present, a company's conservation ratio and annual logging plan, which shows its ability to guarantee a sound supply of raw materials for its wood-based industrial plants, must be presented transparently to the public.

"It is the right of prospective investors to know how a company operates and whether or not it operates in an environmentally-sound manner," he said.

Upgrading

Djamaludin said that in the future, the conservation ratio would be upgraded to allow comparison of the amount of planting and the amount of timber lost.

The calculation of timber loss will take into account, not only logging activities, but also theft, natural disasters and illegal logging, he said.

"If we can conduct continuous monitoring of the cutbacks in wood volume in a certain concession, we can determine whether or not logging activities plus other causes of timber loss are matched by a company's planting activities. If this is so, then everything is safe," he said.

Djamaludin said that state firms have already calculated their conservation ratios.

State enterprises under the forestry ministry consist of Perum Perhutani (which operates in Java), PT Inhutani I (based in East Kalimantan), Inhutani II (South Kalimantan), Inhutani III (Central Kalimantan), Inhutani IV (North Sumatra) and Inhutani V (South Sumatra).

Djamaludin said the conservation ratio of Perum Perhutani was currently 10.96, Inhutani I, 8.7, Inhutani II, 4.26, Inhutani III, 5, Inhutani IV, 1.4 and Inhutani V, 1.43.

Perhutani last year contributed Rp 166.7 billion, more than 50 percent of the state firms' total profits of Rp 207.2 billion.

The total sales value of the enterprises in the first semester of 1995 reached Rp 385.9 billion, as compared with Rp 684.1 billion for the whole of 1994.

Their total assets as of last year were Rp 942.9, up 79 percent from the previous year. Current assets reached Rp 341.3 billion, up by 84 percent.

Meanwhile, the profitability of the firms last year reached 46 percent, while liquidity reached 299 percent. The solvency of the firms was 386 percent, while their debt to equity ratio was 26 to 74. (pwn)