Timber firms need no permit to go public

Timber firms need no permit to go public

JAKARTA (JP): Minister of Forestry Jamaludin Suryohadikusomo
said yesterday that timber companies intending to sell their
shares to the public no longer need to require permission from
his office.

He said that the Ministry of Forestry will instead publicly
disclose the viability of any timber companies intending to sell
their shares to the public.

"The public disclosure will give potential investors a clear
outlook about a timber company planning to go public. They will,
therefore, decide for themselves whether or not to buy its
stocks," he told newsmen at his office.

A timber company planning an initial public offering of shares
was earlier required to produce a recommendation letter from the
Minister of Forestry before selling shares to the public. The
minister's recommendation letter, however, did not serve merely
as a reference but more as permission. At least two companies
have delayed their initial public offering plans due to the lack
of such a recommendation letter.

Companies

One of the companies, PT Artika Optima Inti, a timber
subsidiary of the widely diversified Djajanti Group, failed to
obtain the letter of recommendation as the minister of forestry
considered its forest harvesting potency much smaller than the
capacity of its plywood manufacturing mills. The other company,
PT Surya Damai, also failed to obtain recommendation for a
similar reason.

Jamaludin said recently that if the recommendation letters
were given to those two companies, the government could be
charged with encouraging illegal lumber felling. Timber companies
often violate the government's regulations to selectively cut
trees in order to meet the high capacity of their timber
manufacturing units. In addition, they also often buy logs stolen
from protected forests or nearby forest concession areas.

"What really concerns me is that timber companies might only
try to make profits without giving any attention to the forest
preservation effort," he said.

The minister said yesterday that his ministry will no longer
issue recommendations to timber companies intending to go public
but will instead appoint an independent consultant to assess the
quality of a company's forests and the capability to sustain a
lumber supply to their timber manufacturing units. He said that
the results of the researches will be publicly announced.(hen)