Trading houses needed to facilitate barter deals

Trading houses needed to facilitate barter deals

BANDUNG, West Java (JP): An aircraft executive has suggested
that a trading house be established in order to facilitate the
growing number of barter trades taking place with other
countries.

Heru Santoso, the vice president of the state-owned IPTN
aircraft manufacturing company, said here yesterday that a
trading house is needed not only to arrange the barter deals but
to seek out third partners that will purchase the commodities
that are part of the deal.

Barter trades are more complicated than normal trading
activities in that they involve a buyer and a seller as well as a
third party intending to buy the commodity to be received in the
barter deal, he said.

"That's why a trading house is important," he told The Jakarta
Post.

IPTN signed a barter trade agreement with the Thai government
early last month allowing the aircraft manufacturer to sell its
CN-235 airplanes for 110,000 tons of Thai sticky rice. The
aircraft company will sell the rice to the National Logistics
Agency (Bulog).

IPTN and the Thai government are also negotiating another
barter deal. This time, IPTN intends to exchange its planes for
Thai sugar.

Bulog is expected to buy the sugar if the deal is agreed to,
he said.

He acknowledged that several other countries have proposed
similar barter arrangements with IPTN. "Some want to buy IPTN
planes with cotton and some others want to exchange them for a
ceramics factory," he added.

Heru said that IPTN is still considering the offers because it
"needs to make sure that there are other parties which will buy
the commodities before it agrees to make deals."

ITPN, which has teamed up with Bulog in implementing
its barter trade contracts with Thailand, is seeking more
partners to support its future barter contracts, he said.

Heru said that IPTN expects to sign contracts worth nearly
US$600 million during the Indonesia Air Show to be held in
Jakarta next week.

State-owned Merpati Nusantara airlines will sign a contract to
buy 15 N-250 aircraft for almost $222 million and private airline
company Sempati Air is also expected to sign a contract to
purchase six similar planes at $104 million. Bouraq, also a
private carrier, is expected to sign an $83.5 million deal for
the purchase of five N-250s during the air show.

Heru said that publicly-listed Multipolar and the Ministry of
Defense and Security are also expected to sign their purchase
commitments during the air show.

Multipolar plans to buy two NBell-407 helicopters for nearly
$7 million while the Ministry of Defense and Security will
purchase six NC-212 maritime patrol aircraft and three NBO-105
choppers at a total cost of around $200 million. (17/hen)