Semen Gresik reshuffle set for Feb. 26

Semen Gresik reshuffle set for Feb. 26

Berni K. Moestafa, The Jakarta Post, Jakarta

Publicly listed state cement company PT Semen Gresik is set to
hold an extraordinary shareholders meeting on Feb. 26, with the
main agenda to reshuffle its current boards of directors and
commissioners.

The reshuffle of Gresik's top management comes on the heels of
mounting protests within the firm against a government plan to
sell off a 51 percent stake to Mexico's Cemex SA de CV.

"The shareholders meeting will be on Feb. 26," said a source
at Cemex, which already owns a 25 percent stake in Semen Gresik.

Talks of an imminent reshuffle at Semen Gresik have surfaced
in the local media, with State Minister of State Enterprises
Laksamana Sukardi saying he was mulling over the idea.

In a letter to Semen Gresik, he demanded an immediate
extraordinary shareholders meeting to replace Semen Gresik's top
management and appoint an independent board of commissioners.

The letter, a copy of which was obtained by The Jakarta Post,
was signed by Laksamana on Jan. 21.

Laksamana's deputy for privatization, Muhammad Yasin, was
unable to confirm the reshuffle when contacted by the Post.

Neither Semen Gresik nor Cemex officials were available for
comment.

Efforts to sell Semen Gresik came to a grinding halt last
December amid fierce protests from the company and its units, PT
Semen Padang and PT Semen Tonasa.

Under a put option deal with Cemex, the government planned to
divest its 51 percent stake in Semen Gresik for some Rp 520
trillion (about US$5 billion).

The proceeds should have helped cover a gapping state budget
deficit.

But employees at the three companies demanded the government
cancel the deal, arguing the cement company was too vital to fall
into foreign hands.

Semen Gresik is the country's largest cement producer, thanks
to its total annual production capacity of 17.25 million metric
tons.

Some analysts alleged that resistance to privatization stemmed
from management fears of losing business contracts with local
cement distributors. Individuals within the firms benefit from
contracts which mark up the distribution costs, they said.

Last December, a Romanian privatization expert and chief
economic advisor to the Romanian government, Petrisor Gabriel
Pieu, suggested the government simply reshuffle the management of
state companies that do not support privatization.

He said that with a new board of management that was committed
to privatization, employees would be hard-pressed to continue
protesting.