Cemex agrees to delay Gresik purchase<\/p>\n
Berni K. Moestafa and Kasparman, The Jakarta Post, Jakarta\/Padang<\/p>\n
Mexican-based cement giant Cemex SA de CV said on Friday that
\nit accepted the Indonesian government's decision to extend a
\ndeadline for the sale of a 51 percent stake in state-owned cement
\ncompany PT Semen Gresik under a put option deal.<\/p>\n
\"Cemex would like to express its ongoing support to the
\ngovernment of Indonesia by accepting the request made by the
\nMinister for State Enterprises Laksamana Sukardi to extend the
\nSemen Gresik put option up to December 14, 2001,\" the Mexican
\nfirm said in a statement on Friday.<\/p>\n
On Thursday, the government said it decided to skip the Oct.
\n26 deadline because it had not had time to evaluate the impact of
\nthe deal.<\/p>\n
Cemex, which already owns a 25 percent stake in Semen Gresik,
\ngave the government three years to execute the put option deal
\nfrom its signing in 1998.<\/p>\n
If realized, the sale would rake in around US$520 million, or
\nsome 80 percent of the government's privatization target of Rp
\n6.5 trillion ($635 million) this year.<\/p>\n
The government is in bad need of the funds, given that it has
\nnot been able to secure a single sale in 2001 to help plug the
\nbudget deficit.<\/p>\n
Protests from two Semen Gresik units, PT Semen Padang and PT
\nSemen Tonasa, have attempted to derail efforts to sell the state
\ncompany.<\/p>\n
The two units were merged into Semen Gresik in 1997, under a
\ngovernment initiative to thwart competition from private cement
\nproducers.<\/p>\n
They now reject the put option and demand to be spun off from
\nSemen Gresik, arguing their merger would be detrimental to
\nbusiness.<\/p>\n
In the run-up to the Oct. 26 deadline, locals in Padang staged
\nrallies opposing the sale of Semen Padang to a foreign firm.<\/p>\n
On Friday, they continued protesting the government's
\nreluctance to spin off the unit.<\/p>\n
Legislators in Jakarta have added their support to criticism
\nof the sale, warning Indonesia would lose its national cement
\nindustry to foreigners.<\/p>\n
Economists and analysts, however, have urged the government to
\ngo ahead with the sale as a stimulus for further asset sales.<\/p>\n
They said foreign investors were observing the Semen Gresik
\nevents and the planned sale of PT Bank Central Asia (BCA) to
\ngauge the investment climate here.<\/p>\n
The International Monetary Fund (IMF) in Jakarta has suggested
\nthat the government initiate a campaign to inform the public of
\nthe long-term benefits of selling state assets.<\/p>\n
The fund said that, on top of securing income for the state
\nbudget, privatization improved the efficiency of companies and
\nstimulated economic growth.<\/p>\n
IMF experience in other countries has shown that resistance
\nfrom groups likely to be harmed by privatization was normal.<\/p>\n
A political observer noted that many Indonesian state firms
\nhad become the cash cows of political parties, which would not be
\npossible if they were under private control.<\/p>",
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"sponsor": "Okusi Associates",
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