Krakatau Steel to be privatized next year
Krakatau Steel to be privatized next year
BANDUNG (JP): PT Krakatau Steel, the state-owned steel
producer based in Cilegon, West Java, will go ahead with its
privatization next year.
PT Bahana Prakarya Industri Strategies (BPIS), the holding
company of the country's largest steel producer, said
improvements in the company's financial performance in the last
three years had encouraged the steel company to go ahead with its
delayed privatization.
BPIS president Surasno Paramajuda said Krakatau Steel's
profits rose significantly to Rp 300 billion in 2000 from Rp
212.24 billion in the previous year.
The company's profit, which was only about Rp 164.23 billion
in 1997, jumped to Rp 351.29 billion in 1998 due to the sharp
depreciation of the rupiah against the U.S. dollar. Its profit,
however, dropped to 212.24 billion in 1999.
Surasno said the company's financial improvement had also
increased the company's book value.
The government initially planned to privatize Krakatau Steel
in 1998, but the plan was delayed due to its low market value and
the unfavorable condition in the stock market.
According to the assessment of independent appraising
companies, Krakatau Steel's market value was only Rp 2.5 trillion
in 1996 and Rp 4.4 trillion in 1997.
"We had proposed to the government two months ago to renew the
appraisal," he said.
He said the steel company needed US$300 million in fresh funds
to replenish existing production facilities. Such improvement is
needed before the company can be offered to investors, he added.
According to him, Krakatau Steel is the best among 10
companies under BPIS.
BPIS also supervises aircraft manufacturer PT Industri Pesawat
Terbang Nusantara (IPTN); ship manufacturer PT Pal; weapons and
ammunition producer PT Pindad; explosives producer PT Dahana;
train manufacturer PT Industri Keretaapi (Inka); heavy industry
company PT Barata Indonesia; industrial equipment manufacturer PT
Boma Bisma Indra (BBI); telecommunications manufacturer PT
Industri Telekomunikasi (Inti); and electronic component producer
PT Len. (05/25)