Indonesian Government will not sell Gresik

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