Sale of Semen Gresik may trigger strike

Sale of Semen Gresik may trigger strike

The Jakarta Post, Jakarta

Employees of state-owned cement maker PT Semen Gresik will
strike on Friday, with support from its president, if the
government does not drop plans to sell a 51 percent of the
company to Mexico's cement giant Cemex SA de CV, a union leader
says.

Semen Gresik labor union chief Tjipto Sumarsono said that the
government must not sell the controlling stake to a foreign
company to ensure a domestic supply of cement.

"We will hold a general strike if the government does not
provide a satisfying response by four in the afternoon, December
14, " Tjipto was quoted by Antara as saying Wednesday.

Semen Gresik would suffer at least Rp 1.5-1.8 billion in
potential losses each day, he predicted.

His comments followed a meeting with some members of the House
of Representatives to seek political support to foil the
government's plans.

Tjipto said all the company's 6000 workers employed at the
Semen Gresik facility in East Java would probably participate in
the strike.

"Even Pak Urip has signed on (to support the strike)," he
said, referring to Semen Gresik president Urip Timuryono.

The government has planned to sell shares in Semen Gresik to
Cemex as part of the country's privatization program. The sale
was first expected to be completed on Oct. 26 and then on Dec.
14. The delays have been blamed on protests from various quarters
in West Sumatra and South Sulawesi, respectively the home-bases
of Semen Gresik key units PT Semen Padang and PT Semen Tonasa.

Under the initial plan, the government was supposed to sell
the Semen Gresik shares under a put option deal that expired on
Oct. 26. The deal would have provided the government with $520
million as part this year's overall government privatization
proceeds target of Rp 6.5 trillion ($631 million).

But since the deal would allow Cemex to also control Semen
Padang and Semen Tonasa, local politicians organized protests to
reject the plan, which culminated in the move by the local
legislative council to support calls for a unilateral take over
of Semen Padang from the central government.

Late last month, the government announced a new scheme, under
which the government would sell a 51 percent stake in Semen
Gresik to Cemex and use part of the proceeds to repurchase stakes
in Semen Padang and Semen Tonasa so that the Mexican company
would only have a minority stake in the local units.

Under the new deal, the government would only net around $200
million.

But the protest, believed to be organized by vested interest
groups, continues.