State wood-based firms record soaring profits
JAKARTA (JP): State-owned wood-based companies recorded profits of Rp 181 billion (US$82.2 million) in the first semester of this year, compared to Rp 130 billion in the whole of 1993, a minister says.
"The soaring profits were contributed by the increasing wood prices and government policies allowing state-owned firms to participate in the wood processing business," Minister of Forestry Djamaludin Suryohadikusumo said in a hearing with Commission IV of the House of Representatives (DPR) yesterday.
"Actually, we originally projected that those companies would generate about Rp 88.53 billion in pre-tax profit this entire year," he said.
Djamaludin promised to maintain efforts to increase the state- owned companies' profitability in the coming years.
"We will increase efficiency, progressively diversify the wood-based products and expand our markets," he said.
Reforestation
The Minister also said that his office plans to spend Rp 538.82 billion worth of reforestation funds to finance various projects.
He explained that Rp 306.73 billion (56.43 percent of the total funds) will be used to develop industrial timber estates, Rp 13.36 billion (25.30 percent) for various infrastructure projects and Rp 60.90 billion (11.30 percent) to rehabilitate expired forest concessions.
Rp 17.81 billion (3.31 percent) will be used to finance the housing programs for nomadic forest-cutter families, Rp 12 billion (2.22 percent) for loans for forest farmers and Rp 5 billion (0.93 percent) for small-scale forest-agriculture activities under a presidential aid scheme.
It has been reported that for the last five years the reforestation funds have totaled some Rp 3.04 trillion. All of the money has been placed in time deposits in several state banks and in commercial papers issued by the central bank, Bank Indonesia.
Djamaludin said yesterday that Rp 98 billion of the interest from the saved reforestation funds will be used to finance a number of projects.
About 71.45 percent or Rp 70.09 billion will be used to finance infrastructure and training projects, 11.13 percent or Rp 10.92 billion for forest development control and 10.05 percent or Rp 9.86 billion for employee training.
The minister added that 6.33 percent, or Rp 6.21 billion, will be utilized for research.
IPTN
Djamaludin, however, explained that the interest financing programs do not include the recent controversial Rp 400 billion interest-free loan made in July to the state-owned aircraft manufacturer (IPTN) to support the manufacture of N-250 aircraft.
The loan was made under a presidential decree which was to be disbursed over 10 months since June in which about Rp 40 billion to 50 billion is lent out every month.
"I can tell you that since August, we have allocated about 60 percent of the total loans," Djamaludin told reporters yesterday.
He added that IPTN will return the money once "they are able to produce and sell their airplanes."
At the hearing, Djamaludin also said that in July and August, Indonesia's plywood exports declined and unsold products caused stockpiling at factories.
"We are still investigating whether the decline is only a short-term trend," said the minister, who declined to comment further on this matter.
Indonesia's wood panel exports reached 7.79 million tons worth $5.47 billion last year. (hdj)