The Indonesian government has decided not to sell its 51 per cent stake in PT Semen Gresik Tbk, State Enterprises Minister Sugiharto said in a dialogue with the company’s workers’ union in Surabaya on Monday. He said the privatisation plan was not included in the national budget for 2006.
"PT Semen Gresik workers’ union should not worry and hesitate to maximise their performance for the years to come because the government has decided not to continue with its plan to sell 51 per cent of its shares in the company," he said.
The company’s workers hailed the government’s decision. The government’s plan to sell 51 per cent of its shares to Cemex SA had triggered protests from the workers.
Regarding the company’s plan to set up a new plant the minister said the government still had yet to study the matter. "If it is feasible the government will support it because in 2008 it is expected there will already be balance between production and market demand. In view of that there must already be a concrete development plan for it early next year," he said.
The president director of PT Semen Gresik, Dwi Sutjipto, said in a report that by the end of this year the company was expected to post net profit of around Rp900 billion, surpassing the target by around Rp520 billion.
Regarding the new plant, he said a feasibility study on it was still being completed and would be brought to a shareholders’ meeting in February next year. He said the new plant was expected to be able to produce up to 2.35Mt per year and would draw about US$375m in investment. He said the funds for it would come from the company, bank loans and sale of bonds