The Indonesian government has decided to appoint state-owned Semen Gresik Group to head-up a holding company of state-owned cement producers that is expected to enter the local stock exchange later this year. State-Owned Enterprises Minister Mustafa Abubakar said Friday the ministry was in the midst of preparing legal producers for the establishment of the holding company with Semen Gresik as the lead.
Previously the government said it was opting between creating a new company to lead all existing state cement producers or appointing Semen Gresik as the lead company - according to the Jakarta Post. With the new decision, the Semen Gresik Group will be a parent to PT Semen Gresik in East Java, PT Semen Padang in West Sumatra, PT Semen Tonasa in South Sulawesi, PT Semen Baturaja in South Sumatra and PT Semen Kupang in East Nusa Tenggara.
The combination of the five companies controls more than 50 per cent of the country’s market share. Semen Gresik forecasts that national demand will grow at between 5.5 and 6 per cent this year as the government expects to start some of its infrastructure projects.
"If Semen Gresik will be at the lead, the company will focus more on investment and expansion of the holding company," Mustafa said, signaling that factories under the company would be managed by its subsidiaries. Mustafa said one of the main priorities of the holding company would be to revitalise Semen Kupang and Semen Baturaja, which had been underperforming over the past few years.
The plan to establish a holding company for cement producers is part of the government’s plan to streamline state firms and make them more efficient. The government also plans to establish holding firms for state-owned fertilizer producers, plantation operators, mining companies, banks and shipping services providers.