BUMNs on offer to strategic investors
JAKARTA (JP): The government is offering to sell several state companies to strategic partners in addition to the initial public offering (IPO) plans of eight state enterprises in the April- December 2000 budget year as part of its privatization program, according to a senior official at the State Ministry of Investment and State Enterprises Development.
Herman Sinaga said last week that the move was aimed at raising cash and restructuring the ailing state-owned companies.
Speaking at a recent Indonesia-Malaysia investment and trade forum, Sinaga said that the companies to be offered to investors included cementmaker PT Semen Gresik, port operators PT Pelindo III and PT Pelindo II, plantation firm PTP XII, design and construction management service PT Rekayasa Industry and construction firms PT Hutama Karya and PT Wijaya Karya.
He did not provide details.
The government is currently negotiating with Mexico's Cemex SA de CV, which recently expressed a strong interest to increase its investment in Semen Gresik to become the majority shareholder.
Cemex currently owns a more than 25 percent stake in Semen Gresik, a Jakarta listed company. The government owns 51 percent, and the remainder is held by the public.
The government is considering to spin off PT Semen Padang, a subsidiary of Semen Gresik, to avoid friction with Padang people in West Sumatra, who are strongly opposed to foreign control in the cement company.
Port operator Pelindo III operates several seaports in Central Java and East Java and in the country's eastern provinces, while Pelindo II operates Tanjung Priok port and several other smaller ports in West Java, Sumatera and West Kalimantan.
According to an investment opportunity booklet issued by the ministry, Pelindo III is planning several expansion projects.
The first is the expansion of a container terminal at the Tanjung Emas Port, Semarang, Central Java.
The expansion program is planned for 2000 to 2002 and will cost approximately Rp 23.7 billion (US$3.18 million).
The government is inviting a strategic partner or partners with cash, management and marketing expertise to form a new entity that would own the Semarang container terminal.
The government said that Pelindo III would become a minority holder in the new joint venture.
This privatization method will also be applied to finance the expansion program of Pelindo III's other seaports.
The method was also applied by the government last year when it privatized Pelindo II by selling 51 percent of PT Jakarta International Container Terminal, the container terminal operator at the Jakarta Tanjung Priok seaport, to Hong Kong's Hutchison Whampoa for US$215 million.
Pelindo III is also planning an expansion program for its container terminal operation at Banjarmasin Port, South Kalimantan, with a construction period from 2000 to 2002, costing Rp 70 billion, in anticipation of growing industrial activity in the province.
The third project is the expansion of the Tanjung Intan seaport, Cilacap, Central Java, to anticipate the development of industries and trade activities in the area.
The program will be implemented from 2000 to 2001 with a total project cost of Rp 23 billion.
The fourth project is to upgrade Benoa Port, Bali, to become a tourist object. The project is proposed for 2000 to 2002 and is estimated to cost Rp 20 billion.
The fifth project is the expansion of Kalilamong Port, Gresik, East Java, to become a cargo port or industrial port. It will cost from $200 million to $300 million with a construction period of from 2000 to 2003.
The sixth is the expansion of Tanjung Perak Port, Surabaya, the capital of East Java. The total project cost is estimated at $100 million with a construction period between 2000 and 2001.
Opportunities are also provided by expansion of ports under the management of Pelindo II.
The first is an upgrading of the Bojanegara industrial estate port, West Java, that is estimated to cost $300 million between 2000 and 2005. The port has a strategic location with access to international waters.
The expansion program is in anticipation of a rapid development of the chemical industry as well as other industries in the areas of Bojanegara, Banten and Cilegon, as well as to be an alternative and back-up port of Tanjung Priok Port, Jakarta, which has been experiencing increasing traffic.
The booklet does not provide detailed plans for the other state enterprises to be offered to investors.
Plantation firm PTP XII is based in East Java and focuses on tea and cocoa.
The government wants to invite strategic investors that could help the company to switch the products to more consumer products and create strong marketing and distribution networks.
Rekayasa Industry has been badly hit by the country's economic recession as demand for its consultant services decline and the company has very limited access to the overseas market.
According to a master plan book of state enterprises issued in 1999, the government is considering a joint venture with international or local partners.
Hutama Karya and Wijaya Karya have also been badly hit by the economic downturn. Inviting multinational operations is an alternative to saving the companies.(rei)