Proposed sale of Tuban cement plants rejected

Proposed sale of Tuban cement plants rejected
Published: 14 January 2005

The Lower House of Parliament’s (DPR) Commission VI has rejected a government plan to settle its dispute with Cemex SA with the sale of PT Semen Gresik cement plants Tuban I, II, and III to the Mexican cement maker, Bisnis Indonesia reported.    ’The government must keep a 51 per cent stake in Semen Gresik. That also means it retain the cement plants. There is no point having a 51 per cent stake and then losing the cement plants,’ commission head Khofifah Indar Parawansa told Bisnis.  

The government has recently short-listed options to settle out of court the collapsed put option deal involving the sale of its 51 per cent stake in Semen Gresik to Cemex.  One of the options is to sell Semen Gresik’s cement plants to Cemex.   Cemex has also agreed to drop the international arbitration it filed in 2003 against Indonesia at the International Center for Settlement of Investment Dispute in Washington. The suit could reportedly cost Indonesia some US$400m.

Separately, Koran Tempo cited Semen Gresik director Hasan Baraja as saying the option to sell the Tuban plants to Cemex will see Indonesia lose control of its cement industry to foreign investors.   Baraja said foreign investors will control 92 per cent of cement industry once Cemex takes over Tuban plant. The government of President Susilo Bambang Yudhoyono has targeted to reach a deal with Cemex within its first 100 days in office.