Clough says may limit Indonesia exposure

Australian engineering group Clough Ltd said on Wednesday high levels of corruption and a difficult business environment have forced it to consider limiting its exposure in Indonesia, Reuters reported.

Clough, which has been doing business in Indonesia for more than 30 years, specialising in oil and gas and mine contracting.

But chief executive Brian Hewitt said his company would be "very cautious" before taking on new work in the country.

"Indonesia is of concern to us," he said.

"We don't see any reduction in the corruption and ineptitude in Indonesia, so we watch it very, very carefully."

Hewitt was speaking after the release of Clough's 2001/02 net profit of A$30 million (US$17 million), up 12 percent from the previous year.

Group revenue rose nine percent to A$785 million, while earnings before interest and tax (EBIT) were down 4 percent to A$42.2 million.

Overseas operations contributed A$502 million, 64 per cent of revenue, with much of that generated in Indonesia, Thailand, Vietnam, Pakistan and India.

"We're committed to Indonesia. We've got a lot of people up there. But you've got to have it right. You've got to stick with clients you can trust, you've got to stick with a currency that's firm, and you've got to get acceptable contract conditions," Hewitt said.

"Our feeling is that the opportunities for that scenario are getting thinner all the time."

Clough's operations in Indonesia include construction of oil and gas platforms for deep-sea exploration and production. It is currently building the A$160 million West Seno production facility for Unocal in waters 1,060 meters deep, a record for offshore Indonesia. (*)