Van der Horst to enter oil and gas sector
JAKARTA (JP): The publicly-listed flexible packaging manufacturer PT Van der Horst Indonesia (VDHI) plans to move into the Indonesian oil and gas sector through a joint venture operation, a top company official said.
VDHI president Hadi Sutanto said on Friday that the oil and gas sector had the potential to yield a good return on investments.
He said the planned business unit, expected to begin operating in the third quarter of this year, would provide maintenance services in the oil and gas sector.
VDHI manufactures flexible packaging for food sector industries but is 49 percent owned by Van der Horst Ltd., an engineering company listed in Singapore.
Shares in VDH Singapore were among the most active on the Singapore Stock Exchange two years ago after two powerful Indonesian business figures entered the company.
Bambang Trihatmodjo, the second son of former president Soeharto, and Johannes Kotjo, a financier renowned for his ability to make profits through acquiring listed companies overseas, joined VDH at the height of the boom years in Southeast Asia.
With their talented new management, VDH Singapore went on to win a number of contracts for Indonesian mega-projects, including the construction of an oil pipeline and power plants.
Hadi, however, stressed that VDHI was no longer linked to the former first family because Bambang sold his stake in the Singapore operation last year.
Soeharto abruptly relinquished power to his protege B.J. Habibie last month following political unrest which claimed more than one thousand lives.
Formerly it was almost impossible to win large business contracts without a link to the Soeharto family, but their name has now taken on pariah in the corporate boardrooms of the world.
VDHI used to be called PT Super Indah Makmur. It went public in 1994, then changed its name to VDHI in 1996 after it was acquired by the Singapore operation. The company then diversified into the infrastructure sector after winning contracts to build a toll road and a US$50 million power plant in Central Java.
The toll road project was canceled by the government after the monetary crisis hit the country in July and the company decided not to begin construction of the power plant because of the difficulty of raising funds, again due to the crisis, Hadi said.
VDHI reported a 1998 first quarter net profit of Rp 8.97 billion (US$780,513), compared to Rp 1.8 billion for the whole of 1997.
However, operating profit was only Rp 408.18 million this year.
Hadi said that the increased net profit was largely caused by a forex gain resulting from the postponement of a $2.5 million investment in new machinery.
He added that the company's cost-pricing policy and quality control contributed to its profitability.
"Many packaging companies have become involved in a price war and some have collapsed, but we have maintained our prices above basic costs," he said. (rei)