West Sumatra rejects new Semen Gresik plan<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The West Sumatra people rejected the government's new plan for
\nthe sale of the state-owned cement producer PT Semen Gresik to
\nMexico's Cemex SA de CV, insisting that the local PT Semen Padang
\nmust first be separated from its parent, Semen Gresik.<\/p>\n
The rejection was made during an abruptly held meeting on
\nSaturday afternoon after the government had announced the new
\nplan. The meeting was attended by provincial administration
\nofficials, members of the provincial legislative assembly and
\nlocal informal leaders.<\/p>\n
\"The government has deceived and insulted the people of West
\nSumatra for not listening to their aspirations,\" said Faigi Asa,
\nhead of the Indonesian Democratic Party of Struggle (PDI-P)
\nfaction in the assembly.<\/p>\n
Padang, the capital city of West Sumatra province, is the
\nhome-base of Semen Padang.<\/p>\n
Faigi demanded the government unwind Semen Padang from Semen
\nGresik before selling the latter to Cemex.<\/p>\n
\"If there is no spin off by Dec. 14, we will take over Semen
\nPadang. No more excuses from the central government,\" he said,
\nreferring to the deadline in the agreement the government has
\nwith Cemex to sell Semen Gresik.<\/p>\n
The government announced on Friday that it would sell a 51
\npercent stake in Semen Gresik to Cemex, and use part of the
\nproceeds to subsequently repurchase a majority of the shares in
\ntwo subsidiaries: Semen Padang and PT Semen Tonasa.<\/p>\n
The two units contribute half of the Semen Gresik group's
\nproduction of 12.29 million tons.<\/p>\n
The people of South Sulawesi, the home-base of Semen Tonasa,
\nhave also made similar demands to those of West Sumatra.<\/p>\n
The protest by the local people has long been a major
\nstumbling block in the government's efforts to privatize Semen
\nGresik so as to raise cash to help finance this year's state
\nbudget deficit. The government had to extend an earlier Oct. 26
\ndeadline to sell Semen Gresik to Cemex to Dec. 14 due to the
\nprotest.<\/p>\n
Under the new government plan, Cemex would end up as the
\nmajority owner of Semen Gresik with 76 percent of its shares,
\nwhile the investing public would have 23 percent of the shares.
\nCemex already owns 25 percent of the shares.<\/p>\n
Cemex and the public would still own 49 percent stakes in both
\nSemen Padang and Tonasa through Semen Gresik.<\/p>\n
Local economist at the University of Andalas, Azhar Makmur,
\nsaid this indirect control of Semen Padang was the crux of the
\nproblem that made the plan unacceptable to the West Sumatra
\npeople.<\/p>\n
In South Sulawesi, Arifuddin Saransi, a member of the
\nprovincial legislative assembly, said the new plan did not make
\nany difference because Cemex would still have influence over
\nSemen Tonasa's management.<\/p>\n
The people of Padang have been the strongest in resisting the
\nprivatization of Semen Gresik.<\/p>\n
Arguing that Semen Padang was built on their ancestors' land,
\nthey demand that the company be spun off from Semen Gresik.<\/p>\n
Groups claiming to represent the people of Padang have visited
\nJakarta frequently, urging authorities here to push ahead with a
\nspin off.<\/p>\n
Experts, however, warned of groups instigating such public
\ncampaigns to protect their interests, with one political observer
\nnoting that many state-owned firms had been treated as cash cows
\nfor political parties.<\/p>\n
Meanwhile, West Sumatra Governor Zainal Bakar was strongly
\ncriticized during the Saturday meeting because he declined to
\ntake a clear stance on the issue. He argued that Jakarta had yet
\nto formally brief him on the new plan.<\/p>\n
The government said it expected to net around US$200 million
\nfrom the new sale plan.<\/p>\n
This compares to $520 million under the original deal with
\nCemex, which will expire on Dec. 14. The proceeds, if realized,
\nshould help to cover this year's state budget deficit.<\/p>\n
Meanwhile, Cemex has so far declined to comment. A
\nspokesperson at Cemex Indonesia said the company was preparing a
\nstatement, which she expected to be issued this week.<\/p>\n
Meanwhile in Jakarta, Azwir Dainy Tara, deputy chairman of the
\nHouse of Representatives Commission V, which among other things
\noversees state firms, described the new plan as an acceptable
\ncompromise.<\/p>\n
He said a hearing with the government was due to be held this
\nweek to discuss Semen Gresik.<\/p>\n
\"The government has said they will make a decision on Semen
\nGresik with the approval of the House,\" Azwir said.<\/p>\n
With this in view, he said Commission V members planned to
\nvisit Semen Gresik, Semen Padang and Semen Tonasa.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/west-sumatra-rejects-new-semen-gresik-plan-1447893297",
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