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Govt debuts state-owned defense holding firm
Defense Minister Prabowo Subianto expects the company to be the 50th-biggest defense firm in the world by 2024.
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A soldier tries out an SS2 subsonic 5.66 assault rifle made by state-owned PT Pindad at the Defense Ministry building in Jakarta on June 9, 2016. Pindad has been acquired by state-owned PT LEN to form a new defense holding company. (JP/Dhoni Setiawan)
T
he State-Owned Enterprises (SOEs) Ministry launched Defend ID on Wednesday as a holding firm for national defense companies as part of its SOEs-restructuring program.
Electronics manufacturer PT LEN will act as the holding entity for aircraft maker PT Dirgantara Indonesia, shipbuilder PT PAL Indonesia, weapons manufacturer PT Pindad and explosives maker PT Dahana.
SOEs Minister Erick Thohir instructed LEN to oversee the financial, marketing, operational and portfolio management of the member companies. Defend ID is expected to minimize business overlap.
“This defense holding company has to strengthen the national defense ecosystem, not only among members, but also working with other SOEs and the Indonesian Military [TNI],” he said, specifically referencing the Army, the Air Force and the Navy.
Erick was accompanied by Defense Minister Prabowo Subianto and President Joko “Jokowi” Widodo during the launch ceremony at the office of PAL in Surabaya, East Java.
The move continues the government’s SOEs-restructuring program by creating holding firms to reduce SOEs’ reliance on state capital and support. Some of the holding firms have similar brand names, such as mining firm Mind ID and food producer ID FOOD.
The defense holding was legally established on Jan. 12 through the issuance of Government Regulation No. 5/2022 on a state capital injection for LEN. The regulation transferred majority stakes in the four other defense firms to the electronics manufacturer.
