Prabowo Reveals Three State-Owned Enterprises Were Almost Sold to Foreign Entities
President Prabowo Subianto recounted that he once thwarted attempts by certain parties to sell the domestic defence industry to foreigners because the state-owned companies were considered incapable of generating large profits.
“There were so many companies that, at one point, were about to be sold to foreigners — I forbade it!” President Prabowo said in a speech at the inauguration of five dams at the Meninting Dam in West Lombok, West Nusa Tenggara (NTB), on Friday, 10 July 2026, as quoted by Antara.
He stated that certain parties had previously wanted to sell PT PAL, PT Pindad and PT Dirgantara Indonesia. “The defence industry was about to be sold. PT PAL was to be sold, PT Pindad was to be sold, PT DI was being killed off and put up for sale. We revived them! Now, we will revive all of those companies,” he said.
Prabowo, who served as defence minister during the second term of 7th President Joko Widodo’s administration from 2019 to 2024, then announced that these red-plate defence companies have now grown and developed rapidly.
“PT PAL can now build magnificent warships. PT PAL can now build submarines. PT PAL will build sophisticated vessels,” Prabowo said.
Indeed, according to Prabowo, Pindad has secured a contract from Saudi Arabia. “All the rifles and machine guns for the Saudi Arabian army will be manufactured by PT Pindad. Our weapons are proven,” he said.
Since 2022, a number of red-plate companies operating in the defence industry have been consolidated under the holding company Defend ID. The five companies in Defend ID are PT Len Industri as the parent company, along with PT PAL, PT Dirgantara Indonesia (DI), PT Pindad and PT Dahana.
PT PAL Indonesia, Indonesia’s largest shipyard headquartered in Surabaya, East Java, has produced various types of vessels, including warships and hospital ships for domestic needs, as well as for export abroad. To date, PT PAL has built a submarine at its Surabaya shipyard in cooperation with South Korea’s Daewoo Shipbuilding & Marine Engineering (DSME), namely the KRI Alugoro-405.
In early July 2026, PT PAL also entered the physical construction phase of two Scorpene submarines in partnership with Naval Group. The two companies began the first steel-cutting stage this month. The Scorpene is a sophisticated submarine made by France’s Naval Group and ordered by Indonesia. The two Scorpene submarines ordered by Indonesia will be built entirely at PT PAL’s shipyard in Surabaya.