S. Sulawesi renews fight for Tonasa's spin-off

S. Sulawesi renews fight for Tonasa's spin-off

Ari Arief, The Jakarta Post, Makassar

South Sulawesi Governor HZB Palaguna said the provincial
administration and the management of state-owned cement factory
PT Semen Tonasa were committed to fight for the company's spin-
off from PT Semen Gresik in East Java.

"The proposed spin-off is really the aspiration of local
people in the province and we are committed to fight for it,"
Palaguna said after receiving the company's newly appointed
management at his office here on Tuesday.

The new management briefed the governor on the results of the
meeting of the company's stakeholders that the management would
continue to fight for the company's separation from Semen Gresik.

Palaguna was responding to a demonstration by the company's
workers on Monday, demanding the central government spin off the
company from Semen Gresik.

The workers held the demonstration in protest over the
government's plan to sell a controlling 51 percent stake in the
company to Mexico's cement giant Cemex SA de CV. Semen Tonasa and
PT Semen Padang in West Sumatra are two key units of Semen Gresik
offered by the government to Cemex to raise cash to finance the
state budget.

The company's president, Sadman, confirmed that the
stakeholders along with the management have decided to meet the
workers' demand for the company's spin-off but said the deal
would be done as soon after the government had the funds to
purchase the majority of its stake from Semen Gresik.

"The spin-off is expected to encourage workers to work harder
and take special pride in the company," he said.

He hailed the central government's decision to appoint two
local people of the three members of the company's board of
directors.

Sadman said the management aimed at increasing its profit to
Rp 45 billion (US$5 million) this year from Rp 43 billion in
2001.

The target could only be reached if the management and workers
are committed to improve productivity, he said.

Many analysts, however, have said that the opposition to the
privatization of Semen Gresik is being organized mainly by
parties who fear a loss of benefits and privileges they have
enjoyed if the company falls into the hands of a foreign investor
like Cemex.

State-owned companies have long been treated as cash cows by
corrupt politicians and bureaucrats.