Cemex to become majority shareholder in Semen Gresik
JAKARTA (JP): The government tentatively agreed to a proposal by Mexico's Cemex SA de CV to increase its stake to become the majority shareholder in state-owned cementmaker PT Semen Gresik.
"Cemex wants to raise its stake (in Semen Gresik) to become the majority shareholder and the government has agreed in principle to this," State Minister of Investment and State Enterprises Development Laksamana Sukardi said on Friday.
Laksamana was speaking to reporters after accompanying a Cemex delegation to a meeting with President Abdurrahman Wahid.
He said Cemex was interested in investing in Indonesia and was considering moving its headquarters to Jakarta if its plan to become the majority owner in Semen Gresik went through.
Laksamana's comments came as a surprise because a previous attempt by the Mexican cementmaker to become the majority shareholder in Semen Gresik failed after the proposal was rejected by the public, particularly residents of West Sumatra.
Laksamana said the government had not yet decided on how many additional shares of Semen Gresik would be divested or at what price.
"The President said the important thing was that the aspirations of the people of Padang (in West Sumatra) were accommodated," he said.
Semen Gresik is Indonesia's largest cementmaker. The company is based in Gresik, East Java, but also owns two other cement companies -- PT Semen Padang in West Sumatra and PT Semen Tonasa in South Sulawesi.
The previous administration of president B.J. Habibie initially planned to sell 35 percent of the government's stake in Semen Gresik as part of its privatization program to raise cash to finance the state budget.
The government controlled a 65 percent stake in the company at the time, while the other 35 percent was publicly held.
Cemex, the world's third largest cementmaker, won the first round of the bidding process in July 1998 for the government's 35 percent stake.
But the decision was met with protest by the public as it would have given Cemex a controlling ownership in Semen Gresik as well as in Semen Padang. This forced the Habibie administration to divest only 14 percent of the government's stake.
Cemex and the government reached an agreement in September 1998, with Cemex paying US$1.38 per share, or $114.6 million, for the 14 percent stake.
Cemex now owns a 25 percent stake in Semen Gresik after increasing its investment in the company by buying additional shares on the open market.
Laksamana did not comment on whether the government expected to face a similar nationalistic outcry over the new plan.
Resistance to foreign control over Indonesian resources seems to have gained steam lately, particularly with the high-profile allegations of environmental destruction and human rights violations by gold mining company PT Freeport Indonesia in the country's easternmost province of Irian Jaya.
Laksamana is under pressure to raise some Rp 6.5 trillion from the government's privatization program this year to help finance the April-December 2000 state budget.
The privatization revenue target was initially set at Rp 5.9 trillion, but legislators forced the government to raise the target in order to fund a larger increase in the salaries of government employees.
Semen Gresik was not even on the list of state companies to be included in the privatization program this year.
The government initially planned to divest between 20 percent and 49 percent of its stake in eight state companies. These companies are airport operator PT Angkasa Pura II, coal mining company PT Bukit Asam Batubara, plantation firms PT Perkebunan Nusantara III and PT Perkebunan Nusantara IV, fertilizer producer PT Pupuk Kaltim, pharmaceutical manufacturers PT Indo Farma and PT Kimia Farma, and publicly listed mining firm PT Aneka Tambang. (rei/prb)