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.