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Indonesia's major state enterprises join fray to go global
As many state-owned enterprises (SOEs) opt to remain small while some head toward failure, a few others have successfully launched overseas operations and aim to expand further
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s many state-owned enterprises (SOEs) opt to remain small while some head toward failure, a few others have successfully launched overseas operations and aim to expand further.
State-owned cement maker PT Semen Indonesia and telecommunication operator PT Telekomunikasi Indonesia (Telkom) go against the belief that SOEs are hindered from moving forward, shackled by the involvement of politicians and inefficient bureaucracy in the country.
Semen Indonesia expects to commence operations in Myanmar this year or the next, having allocated between US$200 million and $300 million to aid in the acquisition of a company in the ASEAN country.
'We are still in talks with potential partners in Myanmar to determine the valuation, but they have basically agreed to collaborate with us,' Semen Indonesia president director Dwi Soetjipto said.
Semen Indonesia currently also operates in Vietnam through its subsidiary Thang Long Cement Joint Stock Company (TLCC).
'In terms of overseas expansion, our main focus is now to increase production capacity in Vietnam and make it a hub for the East Asian market,' Dwi said.
Semen Indonesia also plans to spend another $250 to $300 million to establish a new plant in Vietnam next year, increasing TLCC's total production to 4 million tons per year from 2.5 million at present.
Meanwhile, Telkom signed on Thursday a $250 million deal on the construction of a submarine cable system that will make the country an Internet transit hub in the near future.
With the infrastructure, Internet traffic will be able to reach the global traffic hub, the United States, directly without transiting in countries such as Singapore, Hong Kong or Japan.
Telkom's subsidiary, PT Telkom Internasional (Telin), will also expand this year to Saudi Arabia, Macau, Taiwan, US, Australia and New Zealand.
Telin president director Syarif Syarial Ahmad said if all planned international expansions were successfully carried out this year, his firm would be officially present in 10 foreign countries.
Telin currently operates in Malaysia, Singapore, Timor Leste and Hong Kong.
Syarif said that in Saudi Arabia, Telin would partner with local operator Mobily for co-branding, which was expected to launch this September.
'In Macau, everything has been settled. We're just waiting for the implementation. In Taiwan, we're now negotiating with Cung Hwa Telecom,' he said.
Syarif said that in Australia alone, his firm aimed to acquire 75 percent of a business process outsourcing (BPO) firm with a total budget of $8 million.
'In New Zealand, meanwhile, we plan to acquire 27 percent shares of a local telecommunication operator that controls around 60 percent of the telecommunication market there,' he said.
Other SOEs, such as energy firm PT Pertamina, state lenders Bank Mandiri and Bank Negara Indonesia (BNI), are also joining the fray with the aim of replicating their success in Indonesia in neighboring countries.
There are currently 138 state firms operating in the country, of which 20 companies are listed on the Indonesia Stock Exchange (IDX), State-Owned Enterprises Ministry data shows. The government has urged state firms to go public to gain a broader funding base to expand their businesses, but some firms have been deemed unready to prepare good financial books to attract investors.
