Padang's takeover a success

Padang's takeover a success

Kasparman Piliang, The Jakarta Post, Padang, West Sumatra

After years of struggle, the officials of publicly listed
cement producer PT Semen Gresik finally managed to enter the
compound of the firm's subsidiary PT Semen Padang on Monday and
started to take over the latter's management.

No riots or commotion occurred during the takeover despite the
fact that the situation had been tense for days as thousands of
the firm's workers, who support the old management, promised to
resist the takeover.

In anticipation of possible riots, hundreds of police and
military personnel, accompanied by three police dogs, were
fielded to guard Semen Gresik's officials as they entered the
compound.

Semen Padang's new president director Dwi Sutjipto and new
president commissioner Ismed Yuzairy promised to realize the plan
of spinning off Semen Padang from Gresik.

"We are determined to press ahead with the spin-off together
with West Sumatra's people," Dwi said as quoted by Antara on
Monday.

Reportedly, State Minister for State Enterprises Laksamana
Sukardi has already approved the spin-off plan.

Despite Dwi's promise, many Semen Padang workers still could
not accept the presence of the new management.

The old management, supported by most of its workers and local
politicians, who detested the fact that Gresik had been partly
controlled by a foreign investor, have struggled for years to
have Semen Padang spun off from Gresik.

The takeover of Semen Padang came following a ruling issued by
the Padang District Court on Aug. 13. ordering the former
directors and commissioners to leave the company's headquarters
and allow the new management appointed in May this year by
Gresik's shareholders to take over.

The ruling also said if the former management disobeyed the
ruling, they would be fined Rp 10 million (about US$1,100) each
day following the date the ruling was issued.

Despite the conflict, the plant continued producing cement.

However, the lengthy dispute has made publicly-listed Gresik
unable to complete its consolidated financial report, forcing the
Jakarta Stock Exchange (JSX) to suspend Gresik's stock trading
from May to June.

Semen Padang's shares are 99.99 percent owned by Gresik, which
is 51 percent owned by the government, 23.46 percent by the
public and 25.53 percent by Mexico's Cemex SA de CV who became
Gresik's shareholders in 1998.

The dispute stems from the government's plan to sell its
remaining 51 percent stake in Gresik to Cemex.

Semen Padang's old management and several nationalist local
politicians, who feared that Cemex would control Semen Padang
through Gresik, demanded that Semen Padang be spun off from
Gresik. Later, Gresik agreed to spin off Semen Padang, but it was
still unable to take over its management.

In August this year, the government reportedly invited Cemex
to sit together to solve the dispute. The move followed Cemex's
letter to the government, asking the latter to help end the
dispute.

Aside from Semen Padang, Gresik wholly owns Semen Tonasa in
South Sulawesi.

Data shows that Gresik's combined output is 17.25 million
metric tons per year. Meanwhile, Semen Padang has an annual
capacity of 5.5 million metric tons and Tonasa has an annual
capacity of 3.48 million tons.