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.