Semen Padang in severe financial trouble seeks help

The Jakarta Post, Jakarta

PT Semen Padang, a 100 percent subsidiary of the publicly listed cement producer PT Semen Gresik, is said to be in such financial difficulty that even for paying the wages of its employees, it has to ask for help from its parent company.

According to a letter signed recently by Ikhdan Nizar, Semen Padang president, the company was asking Semen Gresik to lend a hand with payments of the former's employee salaries.

Obtained by The Jakarta Post, the letter stated that the request was due to financial troubles.

Details were not included in the letter.

It stated, however, that the company had cut the wages of employees for March, in what, it claimed, was not only for efficiency but also for the financing of the struggle to spin off Semen Padang from its parent.

"We have been trying to make an effort to plug the company's cash flow problems, including a 10 percent cut in employee wages, but that failed to resolve the problem," the letter said.

A copy of an employee's pay slip was attached, along with the copy of the letter.

Should this be true, it will come as something of a surprise, given that Semen Padang, during its die-hard opposition to the privatization plan of Semen Gresik, had claimed to be in such a healthy financial and managerial state that it did not need foreigners taking over the company.

Semen Padang came into the media spotlight several months ago when it fiercely opposed the government plan to sell its 51 percent stake in Semen Gresik to Mexico-based cement giant Cemex de SA.

The company's management and employees, backed by local legislators, took to the streets, rejecting a foreign majority shareholding in the West Sumatra-based state firm.

Their relentless protests finally paid off, as the government decided to back down from the plan.

Meanwhile, Ikhdan, when contacted to comment on the matter, denied that he had ever sent a letter to Semen Gresik asking for help for any payments.

"No, (there's) no letter signed by me that has been sent to Semen Gresik asking for help for our employees' monthly wages," Ikhdan told the Post on Thursday.

He added that his company did not need to do so, as there were no such financial or cash flow difficulties.

In fact, he went on to say, the company would report a 2001 profit of hundreds of billions of rupiah.