Analyst calls for more state firms consolidations
Analyst calls for more state firms consolidations
JAKARTA (JP): State-owned companies should carry out huge
consolidation measures in order to survive in an increasingly
global free trade, an analyst said yesterday.
The director of the Indonesian Business Data Center,
Christianto Wibisono, said consolidation measures were necessary
to create a strong synergy between state-owned companies.
"Consolidation could be in the form of mergers between
companies in the same sector or mergers of upstream and
downstream companies," he said.
He cited companies operating in shipping, cement, plantations,
and paper businesses that could merge to strengthen their
businesses, including state forestry company Inhutani I-IV with
paper manufacturer and bank note maker, Peruri, and printing
companies.
"Some companies have started to merge, but the process is so
slow, that it will be hard to catch up with the private sector,"
he said.
He said state-owned toll road operator Jasa Marga should merge
with an asphalt maker.
Christianto said privatization was another option but warned
that the privatization process must be transparent to stop it
benefiting only certain people or businesses.
Indonesia has 165 state-owned firms with 400 subsidiaries
operating in 72 sectors.
Their total assets in 1995 were about Rp 312 trillion
(US$129.46 billion) against Rp 343 trillion for the country's top
300 private companies, he said.
The private companies have rapidly developed since 1990,
exceeding the growth of state-owned firms.
The businesses of many state firms, especially trading
companies, were suffering from a rapidly changing market, he
said.
In 1995, the sales of the 165 state firms were only Rp 100
trillion against those of the 300 top private firms which
exceeded Rp 200 trillion.
He said deregulation had encouraged private firms.
Christianto urged the government to prepare more state
companies to list on the stock market.
He said the government's privatization program aimed to float
only two or three state firms a year.
"If we keep going at this rate, it will take about 55 years
before all the companies become publicly listed," he said.
He urged the government to facilitate the initial public
offering process for state firms.
The Indonesian Business Data Center is an independent
organization that has monitored the performance of state
enterprises since 1985. (02)