Lewa Pardomuan, Jakarta – Indonesia's state-owned aircraft manufacturer Industri Pesawat Terbang Nusantara (IPTN) said on Thursday it had found counter-trade deals beneficial and denied the bartering option had been taken because of difficulty in selling its planes.
IPTN, headed by Research and Technology Minister Jusuf Habibie, said it had so far signed counter-trade deals with Malaysia and Thailand worth $135 million in exchange for sales of its CN-235 turboprop aircraft.
From Thailand, Indonesia is to receive 110,000 tonnes of rice, while from Malaysia it will obtain 20 trainer aircraft and 1,500 Proton sedan cars.
"Habibie is very eager in doing business through counter-trade. It is of course beneficial for Indonesia because we want to sell our aircraft. We are optimistic about the prospects of such trade," IPTN's chief executive officer, Salomo Pandjaitan, said on the sidelines of a counter-trade conference.
When asked if counter-trade deals were preferred because of low demand for the aircraft, Pandjaitan said: "No. Frankly, we were rather disappointed about the cynical point of view that we sell planes for rice. In fact, we received cash for the sale," he said.
Although the funds were used to purchase commodities and goods from buyer nations, IPTN would receive cash in turn from other government departments, he said.
IPTN produces the 44-seater CN-235 jointly with Spanish aircraft manufacturer CASA. The company is also marketing its N-250 70- seater aircraft, a larger version of the CN-235, which will begin deliveries in 1998.
Pandjaitan said the company had signed memorandums of understanding (MOU) with South Korea to sell CN-235 aircraft in exchange for infantry fighting vehicles and military trucks in a deal worth $120 million.
He said IPTN would deliver six CN-235s to Malaysia in January, but gave no details on deliveries for Thailand.
"We have also signed an MOU with Pakistan worth $216 million for the purchase of eight N-250 aircraft. Other details have to be finalised because Pakistan also wants an offset deal," he said.
Industry analysts have said counter-trade deals involving the IPTN aircraft underlined Jakarta's reliance on political goodwill to sell its aircraft rather than competitiveness.
But they say sales based on goodwill and political mechanisms are unlikely to continue for long because they are a product of lobbying rather than economic need.
Pandjaitan said the company was also exploring the possibility of selling aircraft to Finland and Croatia through counter-trade deals.
He said Croatia, for instance, had proposed selling fishing vessels.
An IPTN spokesman said on Thursday a total of 160 CN-235s had been sold, with 150 already delivered. Of the total, 32 were sold by Indonesia and the rest by Spain, he said.
He said buyers included the state-run Merpati Nusantara Airlines, the defence ministry, Brunei and the United Arab Emirates.
IPTN, set up in 1976, has been widely criticised for its venture into the high-cost aerospace industry that began with the CN-235. The government has poured $1.6 billion into IPTN, with $650 million earmarked for the N-250s.
But Pandjaitan said the prospects for the sale of the company's aircraft were good.
"The prospect is quite bright. (Minister) Habibie's prediction the N-250 will come good in terms of marketing has been proven. The demand is good in Europe because the plane is quiet and fast," he said.
Habibie has said IPTN has received 219 domestic and foreign orders for the N-250 aircraft, and that it only needs to sell 40 more to break even.