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State firms ready to spend more to revive economy
The government is aiming for state firms to increase their growth-generating capital spending this year to Rp 301 trillion in an attempt to boost economic activities amid slowing growth
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The government is aiming for state firms to increase their growth-generating capital spending this year to Rp 301 trillion in an attempt to boost economic activities amid slowing growth.
State-owned enterprises' (SOEs) capital expenditures will be raised by 18 percent from Rp 255 trillion last year after they receive additional capital injection of Rp 39.9 trillion from the state budget this year.
SOEs Minister Rini Soemarno said the government would aim to make state firms agents of development by boosting their spending on government-related projects.
'We want to utilize state enterprises to develop our economy,' she said.
State enterprises' annual capital expenditures (capex) have increased throughout the years, contributing a larger portion to the country's gross domestic product (GDP).
The spending significantly rose from Rp 93 trillion in 2010 to the planned Rp 301 trillion this year, with contributions to the GDP rising from 1.4 percent to an estimated 2.5 percent, respectively, according to ministry data.
Under the leadership of President Joko 'Jokowi' Widodo, the government aims to boost the country's infrastructure development to reach 7 percent economic growth within its five-year term.
A number of state-owned companies plan to allocate more capex this year to support their expansions as well as the government's development program.
Publicly listed state-owned cement producer PT Semen Indonesia (SMGR) plans to increase its capex to between Rp 7 and Rp 9 trillion, an Rp 3 trillion-increase from last year.
SMGR finance director Ahyanizzaman said his firm would allocate around Rp 1 to Rp 2 trillion to upgrade its packing plants, Rp 5 trillion to construct new plants in Rembang (Central Java) and Indarung (West Sumatra) and Rp 2 trillion for possible international expansion.
SMGR foresees that the new plants will boost its cement production to around 37.8 million tons from 31.8 million tons. The firm's higher cement output will help the country meet surging national cement demand this year, which is forecast to grow by 6 percent.
Publicly listed state-controlled miner PT Aneka Tambang (ANTM), meanwhile, plans to spend around Rp 7.7 trillion in its capex this year, from Rp 2.3 trillion last year.
ANTM is among state companies that will get capital injection from the government in a rights share offering scheme that has been approved by the House of Representatives.
The firm will seek Rp 3.5 trillion in capital injection from the government and another Rp 1.9 trillion from the investing public in the rights issue.
ANTM corporate secretary Tri Hartono said that his firm would use the allocated capex to speed up ongoing projects, including smelter projects in Halmahera (North Maluku) and Mempawah (West Kalimantan).
The smelters would help ANTM process its raw products into semi-finished or finished products in support of the policy that bans raw mineral exports.
'However, how fast we can finish the projects will very much depend on when the stimulus fund can be disbursed,' he said, expecting to secure the fund by the third quarter of this year.
