ANDREW DOYLE / BANDUNG
Indonesian manufacturer in bid to reverse fortunes ahead of public offering next year
Indonesian Aerospace (IAe) is implementing a "survival and recovery" plan to reduce potentially crippling losses in time for its planned privatisation next year.
Forced to drop ambitious plans to certificate the indigenously developed 68-seat N250 regional turboprop in 1998 after spending $900 million on the project, the company has been working on surviving Indonesia's lingering economic crisis.
Jakarta was forbidden from providing further state support for Bandung-based IAe in 1998 in return for a $14 billion International Monetary Fund loan.
The revised plan hinges onselling at least 12 Eads Casa/IAe CN235 utility aircraft annually, plus a similar number of licence-built helicopters, and developing IAe's component manufacturing, design and engineering, and maintenance and modification businesses, says president director/chief executive officer Yusman Syafii Djamal. "We have to re-adjust and re-orientate the vision and mission of the company," he adds.
Key steps so far include the "de-layering" of the corporate structure to give operating units more management autonomy, and reducing the workforce from 15,570 in 1998 to 9,500. An outstanding 1,030 billion rupiah ($100 million) state loan has been converted into equity, leaving the firm with estimated liabilities of 1,600 billion rupiah.
The aim is to increase annual revenues to around 2,060 billion rupiah by 2003 from the 2000figure of 689 billion rupiah, says Yusman. Around half would come from CN235 manufacturing and helicopter assembly.
He adds that the government aims to start privatising IAe by late 2003, probably by selling off subsidiaries piecemeal.
IAe's net loss peaked at 791 billion rupiah in 1998, but was reduced to a 116 billion rupiah deficit the following year, and to 58 billion in 2000.
The projected loss for last year is 33 billion rupiah.
IAe is selling CN235s in direct competition with its joint venture partner EADS Casa, but Yusman aims to negotiate a deal giving the Indonesian company exclusive distribution rights for the Asia Pacific region.
IAe has won limited subcontract work from BAE Systems, Boeing and Korea Aerospace Industries and hopes to expand this business.
According to Yusman, the company still harbours ambitions of completing US and European certification of the N250, and has been in negotiations with several potential foreign investors over securing 929 billion rupiah of additional funding.
Source: Flight International
