Thu, Jan 27, 2005 - Page 5 News List

Business booms for disaster area entrepreneurs

OPPORTUNITY KNOCKS Businessmen are finding that the influx of massive amounts of aid to tsunami-stricken Indonesia offers a chance to turn big profits


For those looking to make a buck, head to tsunami-wrecked Sumatra, says Indonesian entrepreneur Sigip Samsu. He rushed there in the wake of the disaster and hasn't stopped reaping the benefits of a land in need of plenty.

Samsu moved his helicopter charter service to Sumatra just after the Dec. 26 disaster and has been booked solid by aid agencies, journalists and "businessmen looking for opportunities."

Few flinch at his fee of up to US$1,500 an hour.

"We are fully booked," Samsu says of his shuttle service from the Sumatran city of Medan into hard-hit Aceh province. "It's the business of the future."

This disaster, like others before it, has a long list of profiteers. Some are black-market vendors making money off misery: pirated DVDs of the tsunami's real-life horror show are now on sale in Indonesia, Thailand and India.

Then there are people and companies making legitimate profits from the business of disaster relief.

Aid agencies distributing critical food and medical supplies are doing much of their buying locally -- pumping millions of dollars into companies that make the dried noodles, rice, mineral water and medicine that gets handed out to survivors.

USAID, the US government's foreign-aid agency, has spent US$39 million in Indonesia since the disaster struck, spokeswoman Roberta Rossi said by telephone from Banda Aceh.

Buying supplies is only part of the expense. Cartons of aid need to be delivered in vehicles, and the agency allocated US$1 million just to cover the rental of 80 trucks and drivers, Rossi said.

Acehnese who speak English are in high demand by aid agencies and journalists who need translators. The going rate is US$50 a day -- the rough equivalent of a civil servant's monthly wage in pre-disaster Aceh.

Other basic expenses for outsiders in Aceh include drivers, about US$60 a day, and housing. Most aid agencies and media have settled in an upper-class Banda Aceh neighborhood untouched by the disaster, where current market rents rival those of New York City. The rent for a two-bedroom home that previously cost the equivalent of a few hundred dollars has soared as high as US$5,000 a month.

The big work remains ahead -- the rebuilding of bridges, homes and full city blocks of cement buildings that collapsed. Millions of dollars in aid donations are earmarked for the rebuilding phase.

Indonesian companies specializing in infrastructure, cement and heavy equipment have seen share prices soar.

Since Dec. 26, the share price of Adhi Karya, a majority state-owned construction firm specializing in building bridges and roads, has jumped 39 percent, while heavy equipment specialist United Tractors has seen its stock price jump 16 percent.

Overall infrastructure-related firms are outperforming the Jakarta stock exchange index, which has risen only 3 percent over the same period.

"This will be a year of construction," said Baradita Katopo, head of research and Kim Eng Securities. "Many firms are already benefiting from Aceh."

Both local and international telecommunications companies are also raking in money from the increased traffic of aid workers and journalists chatting for hours on mobile phones and satellite systems.

The Thuraya satellite-phone company, widely used across the Middle East and Africa, is accelerating previous plans to boost coverage in Asia.

This story has been viewed 3387 times.

Comments will be moderated. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned.

TOP top