Govt appoints Semen Padang president to lead SG

Rendi A. Witular, The Jakarta Post, Jakarta

The government, as the majority shareholder, appointed Dwi Soetjipto as the new president director of PT Semen Gresik, amid plans by the country's largest cement maker to expand its capacity and cope with threats of future cement shortages.

Dwi, who is currently the president director of Gresik's West Sumatra-based subsidiary PT Semen Padang and has served his entire career in the company, will replace Satriyo.

The decision was made during an extraordinary shareholders' meeting, which ended late on Monday. The government has a 51 percent share in the company, with Mexican cement giant Cemex SA and public investors holding 25 percent and 24 percent, respectively.

Aside from the reshuffle, the shareholders also agreed to retain incumbent Semen Gresik vice president director Francisco Noriega and finance director Cholil Hasan.

New management members include Chabib Bahari, Suharto and Paul Eugene Serrano.

The shareholders have also appointed Agus Tjahyana as president commissioner of the company, replacing Zainal Abidin, and retained Jose Luis Saenz de Miera Alonso as vice president commissioner.

Purwaka, Muhammad Nuh and Jannette V. Sevilla have been included on the list of new additions to the board of commissioners.

A senior official at the office of the State Minister of State Enterprises said Dwi's appointment was primarily attributable to his success in improving Semen Padang's operation.

"Dwi has been appointed as president because he managed to improve the performance of Semen Padang and restore the firm's operation after the 2002 catastrophe," said the official.

Semen Padang management and workers, backed by several local politicians, launched in 2002 a massive strike demanding a separation from its parent company to protest the contractual agreement by the government to sell its controlling stake in Semen Gresik to Cemex.

Years of revolt ended when the government launched a major shakeup in the company's management structure last year.

Elsewhere in the meeting, Cemex representatives refused to approve Gresik's consolidated audited financial statement for 2004, due in part to several question marks in the Semen Padang account.

Gresik vice president commissioner Jose Luis Saenz de Miera Alonso and commissioner Ignacio Ortiz Martin said in a statement that the uncertainties included the significant arrears in the 2002 and 2003 financial statements of Semen Padang to which auditors issued a disclaimer opinion.

Aside from that, the findings of the special audit of Semen Padang have not expressed any formal opinion. The audit was launched in 2003 to uncover the reasons for the problems in Semen Padang.

The shareholders at Tuesday's meeting also ordered the new management of Gresik to conduct a comprehensive feasibility study on plans to construct new plants next year in Central Java, with an expected installed capacity of 2.5 million tons of cement annually.

Gresik is currently utilizing all of its installed capacity of some 6.9 million tons per year.

The company has predicted that there could likely be a shortage in the commodity by 2007, with government-sponsored infrastructure projects spurring demand.