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PTPN III named as holding firm for state plantations
The government officially inaugurated on Thursday the long-waited establishment of two holding companies that will be among the largest plantation and forestry-based business groups in the world
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he government officially inaugurated on Thursday the long-waited establishment of two holding companies that will be among the largest plantation and forestry-based business groups in the world.
The move had been discussed for over a decade at the State-Owned Enterprises Ministry, but it took until Thursday for the plan to materialize.
The Medan-based state-owned plantation company, PT Perkebunan Nusantara (PTPN) III, has been named the holding company for the government's plantation business, which comprises 14 state plantation firms, while Perum Perhutani, based in Jakarta, has been named the holding company for the government's forestry business, which comprises six state forestry companies.
'The plantation holding company will become one of the world's five largest plantation groups,' State-Owned Enterprises Minister Dahlan Iskan said after the launching ceremony, which was held in Surabaya, East Java.
With the establishment of the plantation holding company, state plantations will be better positioned to compete in the world market, he added.
The plantation holding, which consists of PTPN I to XIV, currently hold combined assets of Rp 69.3 trillion (US$5.7 billion), according to PTPN III finance director Erwan Pelawi.
Total assets held by the 14 state plantation firms reached Rp 61.99 trillion last year, according to data from the State-Owned Enterprises Ministry. The figure is far higher than the total assets held by one of Malaysia's largest plantation firms, Felda Global Ventures Holdings, which reached 2.6 billion Malaysian ringgit ($789.65 million) over the same period. As a holding company, Perum Perhutani will lead a forestry group with combined assets of Rp 3.46 trillion.
PTPN III president director Bagas Angkasa said that his first task as president director of the plantation holding company would be to carry out financial restructuring.
- PTPN III will lead govt plantation business which comprise 14 state plantation firms
- The plantation group has total assets of Rp 69.3 trillion
- Perum Perhutani has been named as the holding company for govt forestry business
'In particular, we want to restructure several state plantation firms that are financially weak, such as PTPN I, PTPN II, PTPN XIII and PTPN IX,' he said.
Last year, PTPN II, PTPN XIII and PTPN IX received BB, BBB and B in their financial health ratings, respectively, ministry data showed.
PTPN II, PTPN XIII and PTPN XIV suffered Rp 100.7 billion, Rp 1.2 billion and Rp 135 billion in losses, respectively.
PTPN I, meanwhile, despite being earning an A-rating last year, generated just Rp 38.5 billion in net profit.
'Under the holding, we will also expand our business by acquiring more land, using quality seeds, as well as developing downstream products,' Bagas said, adding that PTPN III was currently constructing an oleochemical plant in the Sei Mangke Economic Zone in North Sumatra.
Bagas said that the plantation holding company would now have around 1 million hectares, which made it the largest landholder of any plantation company currently operating in the country.
Erwan said that the plantation holding aimed to boost sales by 22.5 percent per year and profit by 10 to 15 percent per year.
'By 2019, we aim to pocket Rp 11 trillion in net profit, up from just Rp 3 trillion last year,' he said.
Similar to the plantation holding, the country's forestry holding, which comprises Perhutani and Inhutani I to V, aims to boost its net profit to some Rp 566 billion in 2019 from the Rp 232.4 billion booked last year.
Perhutani president director Bambang Sukmananto said that his main goal was to enhance the holding's competitive edge ahead of the ASEAN Economic Community, which will be launched at the end of 2015.
'Inhutani I, for example, actually enjoys good commodities, but it lacks quality human resources,' he said.
Under the holdings, PTPN III and Perhutani will be able to raise capital from subsidiaries, up to Rp 10.1 trillion and Rp 1.2 trillion, respectively.
PTPN III, which will be wholly owned by the government, will have a 90 percent stake in all of its subsidiaries, while Perhutani, which will also be wholly owned by the government, will have a 100 percent stake in all of its subsidiaries.
