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.