Indonesian government proposes Cemex alternative

Indonesian government proposes Cemex alternative
Published: 29 November 2004

The Indonesian government said it hopes to settle dispute with Cemex Asia over state-owned cement maker PT Semen Gresik by offering the Mexican giant to invest in other companies.  

Cemex already filed an arbitration suit against the government for failure to honor a put option contract allowing it to increase its 25.5 per cent stake to 51 per cent in Semen Gresik.  Plans to increase control of Cemex in Semen Gresik was strongly opposed by PT Semen Padang , one of its subsidiary that demanded spin off if the government is to go ahead with its plan with Cemex. 

The previous government sought to settle the dispute out of court by seeking other investors to buy back the of Cemex in Semen Gresik. Chief Economics Minister Aburizal Bakrie ruled out buy back scheme as the government has no fund, but Cemex will not have the controlling 51 per cent of Semen Gresik as it demands.  Bakrie said the possibility of offering Cemex a stake in a big a petrochemical project now being built in Tuban East Java.