Cement deal necessary: Soeharto

Cement deal necessary: Soeharto

JAKARTA (JP): President Soeharto denied yesterday that he had
ever colluded with businessmen or extended monopoly rights over
certain products to particular parties.

Soeharto was speaking before some 200 members of the
Association of Small and Medium Businesses at his Tapos ranch in
Bogor, West Java, on the subject of his relationship with the
country's wealthiest tycoon, Sudono Salim, also known as Liem
Sioe Liong.

Touching upon the assignment he gave to Sudono two decades ago
to build a cement factory -- which was later criticized as
amounting to a cement monopoly -- Soeharto said: "It wasn't based
on collusion between me and Liem. No. It was for the sake of the
country and the nation."

Soeharto said it was started when an American investor
promised to build cement plants with a production capacity of two
million tons per annum.

The American investor promised to build the first phase plant
with an annual capacity of 500,000 tons, he said.

However, Soeharto said, the investor asked the government not
to extend any new licenses to other investors for other cement
plants before the American investor could accomplish his promise
of building the two cement plants.

"It meant that his cement plants abroad could export their
products to Indonesia. Therefore, we would never be independent
(in the cement industry)," Soeharto said.

"Then I summoned Liem and asked him: 'Are you capable of
building cement plants?' and he answered: 'Yes, I'm'."

Liem started his cement venture in 1973 by establishing PT
Indocement Tunggal Prakarsa. With a current annual production
capacity of 9.7 million tons, Indocement controls 40 percent of
the country's total annual output of some 24 million tons.

"Many have accused us of collusion. The truth is that it is
for the sake of the independence of domestic industries," he
added.

Soeharto denied that PT Bogasari Flour Mill, which is owned by
Liem, had a monopoly over wheat milling in the country.

"Bogasari is just like a tailor. This company gets fees from
milling wheat into flour... Anything else out of the milling,
including flour trading, subsidies and so forth are managed by
the National Logistics Agency (Bulog)," Soeharto said.

Under wheat trade regulations, Bogasari was appointed by the
government, together with state-owned PT Berdikari Sari Flour
Mill in Ujungpandang, South Sulawesi, to process wheat grain into
flour.

Critics have said that Bogasari practically holds a monopoly
over domestic wheat milling, since it also controls the
management of Berdikari's flour milling plant.

Bogasari gets wheat from Bulog, which monopolizes the
importation and distribution of wheat and other agricultural
products in Indonesia, and pays the agency after its products are
marketed.

"They think that Bogasari holds wheat monopoly rights. The
people think so because they actually don't understand the
problem. Some might understand it but have turned the case into a
political issue," Soeharto said.

At yesterday's gathering, Soeharto was accompanied by Minister
of Cooperatives and Small Enterprises Subiakto Tjakrawerdaya and
Chairman of the Indonesian Chamber of Commerce and Industry
Aburizal Bakrie.

Soeharto also called on the people to nurture a positive image
of big business. "The people have rudely accused large entities
of being greedy. This notion should be eliminated," he said.

He said large businesses are necessary to help the small ones
to become larger through a partnership framework.

"Don't confront each other and don't curse each other.
Instead, establish partnerships."

He said the initiative of the country's most influential
business tycoons to help small businesses, which was announced in
Bali last month, should be welcomed.

"Those big businessmen feel a responsibility to help eradicate
poverty in this country," Soeharto said, adding that September's
cabinet meeting had discussed possible follow-ups of tycoons'
announcement. (rid)