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tate owned fertilizer producer PT Pupuk Indonesia Holding Company (PIHC) will acquire ailing shipping firm PT Djakarta Lloyd to help PIHC distribute its products across the country.

State-Owned Enterprises Minister Dahlan Iskan expects Djakarta Lloyd to become PIHC’s subsidiary by the end of this year. “Djakarta Lloyd has large-capacity ships so Pupuk Indonesia will have no difficulty distributing its fertilizer nationwide,” he said.

The move is part of the ministry’s program to restructure state-owned enterprises (SOEs). Djakarta Lloyd will replace Pupuk’s current subsidiary, PT Rekayasa Industri (Rekind), which will be taken over by PT Pertamina, Dahlan went on. He said the restructuring was aimed at creating greater efficiency in SOEs.

Currently, there are seven companies under PIHC: Rekind, PT Pupuk Kalimantan Timur (PKT), PT Pupuk Sriwidjaja Palembang (Pusri), PT Petrokimia Gresik, PT Pupuk Kujang, PT Pupuk Iskandar Muda and PT Mega Eltra.

Rekind is involved in the engineering, procurement and construction (EPC) sector while Mega Eltra is a trading, construction and paint manufacturing company.

According to its marketing director Koeshartono, PIHC produced non-fertilizer products like gypsum and liquid carbon dioxide; as much as 10.5 million tons and 6.04 million tons respectively, last year. However, he said that they were only able to distribute about 1 million tons of their products in their own ships. The remaining distribution was handled by chartered ships. Owning more ships in the future, he said, would be more economical for the company.

Djakarta Lloyd president director Syahril Japarin said that the firm currently had seven large ships: six semi containers and one bulk carrier that could transport 15 million tons a year. He said the shipping line received a boost this year from new contracts from other state-owned enterprises to transport coal and nickel. They secured a 15-year contract to transport coal for electricity firm PT PLN and its subsidiaries PT Indonesia Power and PT Pembangkit Jawa Bali (PJB) and a 12-month contract with mining company PT Aneka Tambang (Antam).

Based on State-Owned Enterprises Ministry data, of a total 141 state-owned enterprises, 23 continued to suffer losses last year including Djakarta Lloyd. Mismanagement is blamed for the decline of the line from its peak between the 1960s and 1990s.