Indofarma named as first privatization target this year

JAKARTA (JP): Director General of State Enterprises I Nyoman Tjager said Tuesday that the government will soon privatize pharmaceutical company PT Indofarma through an initial public offering (IPO) as part of the country's privatization program.

"The first company to be privatized this year is Indofarma... it's the most ready and the easiest," he told reporters on the sidelines of a ceremony at the finance ministry. "We expect to complete it in the first quarter," he added.

But he said that the plan had yet to be presented to Finance Minister Prijadi Praptosuhardjo.

He said that Indofarma was one of eight state-owned companies to be privatized this year in a bid to raise about Rp 6.5 trillion (US$684.21 million) to help finance the 2001 state budget deficit.

He said that the other companies included another pharmaceutical firm PT Kimia Farma, fertilizer firm PT Pupuk Kaltim, publicly-listed general mining firm PT Aneka Tambang, non-listed coal mining company PT Bukit Asam, chemical firm PT Petrokimia, airport operator PT Angkasa Pura II, and plantation firm PTPN III or IV.

"But we'll also see other possibilities," Tjager said, pointing out that there were suggestions to privatize the state owned surveyor firm PT Sucofindo.

Prijadi said last year at a meeting with the House of Representatives commission IX on state budget and finance that Sucofindo would be part of the companies to be privatized in 2001.

Tjager said that the privatization of the companies should have been completed last year but it was delayed due to the unfavorable market conditions.

Tjager said that the privatization program of Angkasa Pura II, which operates the Jakarta Soekarno-Hatta international airport, would be done via private placement to strategic partners as was previously planned.

There have been various plans involving Angkasa Pura II. The company management initially planned an IPO for the company. And the government previously intended to sell 50 percent of its stake in the Soekarno-Hatta international airport to strategic investors including Dutch Schipol Aiport, French Aeroport de Paris and British Airport Authority.

Tjager said that the government had yet to decide the privatization mechanism for the other state-owned enterprises, but added that an IPO would be desirable if market conditions were conducive.

The weak market sentiment due to domestic political and economic instability has been seen as the main factor causing the delay in the privatization program last year.

But some said that the cabinet reshuffle in April and August affected the privatization program.

President Abdurrahman Wahid dismissed Laksamana Sukardi in April from his post as state minister for the development of state-owned enterprises and investments. He then appointed Rozy Munir, seen by analysts as a less capable person but personally close to the President.

The President reshuffled the cabinet again in August and this time he dissolved the ministry of state-owned enterprises and investments, placing SOEs again under the authority of the ministry of finance.

The President then appointed Tjager as director general for SOEs in December last year.(rei)