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Bob Hasan: adding to Astra's assets

Asia Week - February 21, 1997

Buy Astra? Or sell Astra? It depends on what Mohammad "Bob" Hasan will do when he takes over at Astra International, Indonesia's largest manufacturing force. Hasan - king of the Indonesian logging business and golfing buddy of President Suharto, right, - will be anointed Astra's president commissioner at a special shareholders' meeting on Feb. 19.

The new job stems from his stewardship of the holding company Nusamba, which is owned 90% by two Suharto-led foundations and 10% by Hasan. Nusamba controls the largest part of Astra, and can dictate who sits at its head. And that makes Astra insiders nervous.

They expect current president director Teddy Rachmat to be quickly shown the exit, and his corporate development plans immediately reversed. "Suharto doesn't want to be bothered by Rachmat's longterm investments that promised to turn Astra into something like a General Electric," one source says. That sort of change, along with streamlined operations and a selloff of slow-paying assets, would please shareholders, turning the company into a real profit-spinner.

But Hasan's cut-throat timber-cutting competitors predict just the opposite for Astra under Hasan. They say Suharto wants him to build Astra into one of the corporate giants of Southeast Asia, surpassing neighboring Malaysia's cash-rich Petronas. To do that, Hasan will have to continue Rachmat's plan of increasing corporate strength. Hasan's enemies still warn that if Suharto is eclipsed from power, by death or retirement, "Hasan will be the first person to disappear off the face of the earth."

So, really, "Buy or sell Astra?" - now trading at around $2.66 - is not the right question. "Bank on short term profits or plan for retirement" seem to be the real options. At least as long as President Suharto still runs Astra, and Indonesia.