Two state industrial companies may lose over Rp 56 billion
Two state industrial companies may lose over Rp 56 billion
JAKARTA (JP): Two state industrial companies are likely to
suffer losses of Rp 56.3 billion (US$25.9 million) this year due
to the appreciation of Japanese yen against American dollar and
the rescheduling of a number of projects.
In a hearing with Commission VI of the House of
Representatives earlier this week, Minister of Industry Tunky
Ariwibowo named the two companies, PT Rekayasa Industri and PT
Asean Aceh Fertilizer. The latter is a joint venture project
under the Association of Southeast Asian Nations (ASEAN) grouping
Indonesia, Malaysia, Singapore, Thailand, the Philippines and
Brunei.
"Asean Aceh Fertilizer will probably lose some Rp 50.2 billion
due to the appreciation of the yen against the U.S. dollar and
the rupiah," he said. "Last year, this company suffered even
greater losses, which were Rp 61.8 billion," Tunky said.
Rekayasa Industri will likely lose Rp 6.1 billion this year
because of the rescheduling of a number of projects which they
had been awarded, he said.
Last year, Rekayasa Industri recorded a profit of Rp 1.3
billion.
Twenty six other state industrial companies, overseen by the
Ministry of Industry, are projected to generate total profits of
Rp 286.5 billion this year.
Last year, 24 companies booked total profits of Rp 418.8
billion, while the other four companies suffered total loses of
Rp 122.7 billion.
Export drops
Tunky also explained to the commission, which deals with
manufacturing, mining and energy industries, that the country's
exports of 10 major industrial products declined by up to 20
percent during the first five months of this year.
The effected products are textiles, leather goods, steel,
machinery and automotive vehicles, food and beverages, pulp and
paper, ceramics, marbles and glasses, plastics, toys, sports
equipment and musical instruments.
Out of the 10 industrial products, textile and textile-related
products suffered most with a 20-percent decrease to US$2.1
billion in the January-May period from US$2.6 billion in the
corresponding period of last year.
"The decrease in textile exports was heavily influenced by
tough competition with countries which have raw materials and
lower labor wages, like China, India, Pakistan, Bangladesh and
Vietnam," Tunky argued.
Indonesia also faces fierce competition with modern textile
exporting countries like the United States, the European Union,
Japan, Hong Kong and South Korea.
"We lose in head-to-head competition with developed countries
on textile and textile-related products because they have
superior delivery time, flexibility, quality and designs as well
as payment systems," Tunky noted.
Tunky said he is optimistic that textile exports will achieve
an annual target of US$12.7 billion in 1998, however, as the
world's textile demand increases by 2.8 percent annually. (rid)